Hybrid Deal Posts Record Campaign on Companisto

By AltFi on Tuesday 2 September 2014

Savings and Investment

One of the big four German equity crowdfunding platforms has claimed to have hosted the most successful campaign on record.

Weissenhaus Grand Village Resort and Spa has thrust itself into the limelight - having raised €3,450,615 through the Companisto platform thus far. The project was launched in July and has received contributions from 819 different investors – comfortably surpassing its initial fundraising target of €1m. But while the project may well be the largest fundraise ever facilitated by an equity crowdfunding platform – the deal itself is actually not for equity.

Instead, investors are taking part in a subordinated profit participating loan. This is the latest in a number of hybrid products thrown up by the crowdfunding sector. The minimum, fixed interest rate on offer to investors is 4% - and that rate should be paid regardless of the success of the resort itself. But investors could earn as high as 8% per annum if the revenue and occupancy of the Weissenhaus Resort meets certain success criteria. There is seemingly some security on the deal – but the word “subordinated” suggests the involvement of a large investor outside of the Companisto offer, probably with a first charge over that security. The value of the security has not been disclosed.

The monumental fundraise isn’t finished yet. According to the campaign page, the five star resort (situated near to Hamburg) could go as high as €4m before calling it quits.

This campaign is worth flagging firstly, and rather obviously, due to the fact that it’s a record-breaker. But secondly and perhaps more interestingly, it continues the trend of equity crowdfunding platforms branching out into non-equity deals – and doing very, very well in the proess. Crowdcube’s pair of mini-bonds both over-funded. Seedrs’ convertible equity offer maxed out. And now Companisto has struck gold with its profit participating loan. It’s tough to say exactly what’s driving these successes. Perhaps they’re born out of the various platforms’ investors’ desire for diversification. Certainly the Weissenhaus deal is bringing something to the table that is otherwise absent from most equity crowdfunding platforms – a stable source of return.

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