Investing in property can be rewarding but it involves risk. If you choose to invest through British Pearl, you must be aware of and accept the following considerations.
The share investments British Pearl facilitates are defined by the Financial Conduct Authority as investments in non-readily realisable securities. As such, they are only to be marketed to investors with a defined level of sophistication. British Pearl will only market opportunities to those investors categorised as Certified High Net Worth Investors, Self-certified Sophisticated Investors or Certified Sophisticated Investors. If you are in doubt about your investor status, or have not registered with British Pearl, please stop viewing our marketing material and consult the FAQs section of our website or a financial advisor for further information.
Investors should carefully read each property investment’s information pack before making an investment decision, in order to become familiar with the details of the investment, including the potential risks. Investors must be capable of evaluating the merits and risks of any prospective investment. Those investors who do not have this ability or are in any doubt as to whether investing via British Pearl is suitable for them, are encouraged to consult with a financial advisor, accountant or any other financial professional that can help them understand and assess the risks associated with each investment opportunity.
The terms ‘invest’, ‘investing’ and ‘your investment’ below refer to both loan and share investments.
KEY RISKS SUMMARISED
1. Future Performance
Any projections of future performance are based on all known information, internal calculations and opinions of British Pearl; they are not guarantees and are subject to change at any time so should not be relied upon.
2. Loss of Capital
Past performance of any investment, including those British Pearl has successfully completed in the past, is not necessarily a guide to the performance of similar investments in the future. Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth. By investing in property through British Pearl there is a risk that you may not get back what you invest if property prices fall, and you should only invest as much as you can afford to lose and as part of a diversified portfolio. Further, investing with British Pearl falls outside the remit of the Financial Services Compensation Scheme. British Pearl seeks to minimise all identifiable risks, however your investment is ultimately exposed to the UK property market.
3. Investment Income May Vary
Dividend income projections are a guide and not guaranteed. They may be lower than expected or cease completely for a number of reasons, for example, uninsured damage making the property uninhabitable for a period. Equally, interest payments may not be paid every month if an SPV is facing cash flow issues. The amounts due will continue to accrue whether or not they are actually paid.
Any investment you make through British Pearl is illiquid. Each investment is a long term commitment and at the investment exit date a property may take several months to sell. Further, there is currently no active Resale Market for loan units or shares in the property owning companies.
5. Property Development
The development of properties may exceed budgets. Unforeseen events such as changes related to building permits, planning errors or other aspects of the development, shortage of necessary equipment, or adverse weather conditions, or other unforeseen events may cause cost overruns and delay or frustrate completion of a project. There can be no assurance that any overrun resulting from any occurrence will be adequately covered by insurance policies or that such insurance will continue to be available. In the event of a budget overrun the investment may need to seek additional financing from outside sources in order to complete production.
No assurance can be given as to the availability of such financing or, if available on terms acceptable. In addition, in the event of substantial budget overruns, there can be no assurance that such costs will be recouped, which could have a significant impact on the investment results. There can be no assurance that the investment will achieve its investment objectives.
Investing in property should only be done as part of a diversified portfolio. This means that you should invest smaller amounts in multiple asset classes as opposed to a large amount in one or a few. It also means that you should invest only a small proportion of your investable capital in this asset class, with the majority of your investable capital invested in other assets with a liquid market.
You are responsible for the administering of your tax affairs, which may include capital gains and/or income tax. Your tax treatment depends on your individual circumstances and may be subject to change by HMRC in future. We do not provide tax advice and you should seek this independently before investing. It is your responsibility to ensure that your tax return is correct and is filed by the deadline and that any tax owing is paid on time.
8. Exit and Control
British Pearl reserves the right to dispose of the property investment prematurely in order to crystallise gains or cut losses. This is to ensure British Pearl can act in the best interest of all its investors. This may result in investors incurring losses or crystallising taxable income sooner than anticipated. Equally, it may be in the best interests of the investors to delay a sale beyond the expiry of the investment term. In such circumstances, Share Investors would continue to receive dividends where net rental income is generated, and Loan Investors would continue to be entitled to interest payments.