Consortium - Investment Management

Case 1 - Complete Fund Service

The financial services arm of a major international firm of accountants wanted to sponsor a professionally managed bespoke commercial property investment fund exclusively for their private clients. Following initial discussions, the following format for the Fund was agreed:

• Source of funds: SIPP/ SSAS only.
• Investment vehicle: Exempt Property Unit Trust (EPUT).
• Minimum investment in the Fund: £25,000.
• Minimum total equity required to close the Fund: £2 million.
• Investment Term: 5-7 year initial investment period then investors vote to hold, sell or re-gear the assets.
• Property Adviser: Consortium.

Consortium established the EPUT, prepared and then issued the financial promotion, containing all the necessary application forms, to the sponsoring firm who then advised their clients accordingly.

Once the Fund had closed, Consortium identified and negotiated the acquisition of the forward funding of a pre-let retail warehouse development with the aid of a limited recourse bank facility - in the event of default the lender would only have recourse back to the property, not to investors personally or their pension funds.

Case 2 - Fund Vehicle Only

A specialist high net worth IFA wanted to sponsor a series of dedicated property funds exclusively for their clients. They already had an experienced property professional who they wanted to advise the funds regarding property selection and investment strategy and needed an experienced operator and manager to operate the underlying collective vehicles.

Following a number of initial meetings the following format for the funds was agreed:

• Source of funds: SIPP, SSAS and private equity.
• Investment vehicles: English Limited Partnership with an Exempt Unit Trust (EUT) as a feeder fund.
• Minimum investment in the Fund: £10,000.
• Minimum total equity for the Fund to proceed: £2 million.
• Investment Term: 5-7 year initial investment period then investors vote to hold, sell or re-gear the portfolio.
• Property Adviser: Provided by sponsor - the decision to invest etc. in an identified property was to be taken by Consortium based upon the advice of the Property Adviser.

Consortium set up the General Partner Companies for the Limited Partnerships, provided the necessary constitutional documents then established the Limited Partnerships and EUTs. Consortium prepared and issued the Financial Promotions to the sponsoring IFA who then advised their clients accordingly.

Once the funds had closed, the Property Adviser identified properties and advised Consortium throughout the transaction process, and provided ongoing asset management and property management services for the life of the funds.

Other Case Studies

1. Fund Service
2. Property Funds
3. Property services
4. Consortium Venture Funds
5. Offshore Property Funds
6. SIPP / SSAS Property Solutions