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Why investors use British Pearl

6 February 2019 • British Pearl

So why is British Pearl different to other investment platforms that are available in the P2P and crowdinvesting space?

“One of the core beliefs that British Pearl was founded on is that property needed to be revolutionised. On the back of that belief, we have worked to bring an institutional investment management approach to property investment which everyone can benefit from. Reflecting this, our team not only has a strong background in property, but also extensive experience in investment management. The property acquisition process itself can be broken down into key steps, but if I was going to use one word to describe it, I would choose: rigorous.“ Tom Yeomanson, Property Director.

Reduced risk. British Pearl is not P2P

British Pearl is different. We are not a P2P intermediary. Instead, on the British Pearl platform the borrower is an SPV that holds an individual property investment that we manage as an FCA regulated Alternative Investment Fund Manager. We source, secure and manage properties on behalf of our investors. Our Loan Investors are only exposed to the credit/counterparty risk of that vehicle, which is managed by British Pearl, which is operated by property and investment professionals with a successful track record. There is no third party - such as a developer on the receiving side of the loan - and the Loan Investor benefits from a first charge over the property. British Pearl has a direct relationship with all our Loan Investors and, as a result, is highly incentivised to ensure all investments follow a strict due diligence process that clearly details all risks and the full financial projection over the investment term.

One of the key differentiators with regards to risk is the 'seniority' of the loan, i.e. where there is a default by the borrower, the seniority is where you rank as a lender in terms of repayment of capital. The safest is a 'first charge' secured against the underlying security - this is what British Pearl offers. This is where a bank mortgage would normally be ranked and means that you are in line to be paid out by the SPV before the Share Investors. A 'second charge' means that the security you hold is considerably weaker. A loan secured by a second charge will only become eligible to be repaid after the loan secured by the first charge has been repaid in full.

Rigorous property selection. Experts in property and finance

As a team, we review all potential purchases against our robust investment criteria which include income, capital growth, condition, location and kerb appeal, to name a few. While the experience of a trained eye can speed this process up, it is still time-consuming as we carry out reviews against a very large number of possible properties. For every investment that gets past the first hurdle, often more than 100 possible properties will have fallen by the wayside, with only the very best making it through to the second round.

We aim to use our contacts and expertise, supported by a bespoke financial model and further leveraged by a cash buying position to secure the very best property investments for everyone, whether or not they have the time, knowledge or contacts to do it themselves. The challenge is to build a diverse portfolio in terms of property type and location whilst not straying from our strict investment criteria.

Cautious and detailed investment modelling

We believe it is important that investors can see likely returns that an investment will bring over time both in terms of regular income and longer-term capital gains. To do this we carry out detailed investment modelling of all investments that pass through our initial screening process.

Our modelling process demonstrates realistic and achievable returns for our investors and therefore we try to be cautious with our assumptions, remaining consistent with our longer-term approach to property investment.

We model each investment out for the entire investment term (typically three or five years) generating both the annual profit and loss statement and the balance sheet (or capital) evolution. For all investments that we bring to our investors, a summary of the modelling is then presented on the website for investors to be able to review.

So with a focus on reducing risk to investors, detailed modeling and experts in finance as well as property, British Pearl stands out from the crowd.

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Your capital is at risk Investing in property involves risk. The value of your investment can go down as well as up and historic performance is not a guide for future performance. Any projections of future performance are based on all information known at the time of share investment or loan, and internal calculations and opinions of British Pearl. These are subject to change and are not guarantees and should not be relied upon as such. Risks include the total loss of your share investment or loan, variable rental income due to property not being rented or a depressed rental market, and inability to sell your share investment or loan due to lack of a buyer. Investing with British Pearl falls outside the remit of the Financial Services Compensation Scheme. Please refer to the Key Risks section of this site for a more comprehensive description of the risks involved.

British Pearl ® is the trading name of British Pearl Limited (Company No. 7151774), a company authorised and regulated by the Financial Conduct Authority (Register No. 674693) and British Pearl Finance Limited (Company No. 10575280 and Register No. 770867), which is an appointed representative of British Pearl Limited. Both companies are wholly owned subsidiaries of British Pearl Group Limited (Company No. 9701436) and all are registered in England and Wales at 4th Floor, 7-10 Chandos Street, Cavendish Square, London, W1G 9DQ