By Ryan Weeks on Wednesday 18 July 2018
British Pearl will offer both debt and equity investments in UK property.
A newly launched player in the UK proptech sector has clinched a £7m investment. The money comes from Lord Stanley Fink, former CEO and deputy chairman of Man Group, who is described by British Pearl in a press release as a ‘prominent peer and philanthropist’.
British Pearl claims to have become the first property investment platform to offer both debt and equity investment opportunities. Investors may use the platform to buy fractional equity ownership in properties or to invest in first-charge secured loans with loan-to-value ratios of between 50 and 70 per cent.
The platform offers two types of property deals: buy-to-let and development. Buy-to-let equity investors receive a share of any net rental income and of any capital gain on sale, while debt investors receive monthly fixed interest in line with market mortgage rates. For development deals, equity investors are targeting a share of any gain-on-sale, while debt investors receive fixed monthly interest in line with development finance rates.
Loan buyers on the platform may hold their investments within an Innovative Finance ISA, giving them access to tax-free returns of up to 4.4 per cent after fees, based on the first batch of deals. The platform has launched with three investment opportunities made up of six residential units in Acton, Portsmouth and Lancaster. The firm says it will expand into commercial mortgages in the future.
Properties that are available for equity investment will be ring-fenced in a standalone holding company, which is ‘separate from the liabilities of other investments and British Pearl itself’.
Lord Stanley Fink, now a director at the company, said in a statement: “Despite the doom-laden predictions that are being mooted because of Brexit, I’m backing British Pearl and UK property for three reasons: first, the country is in desperate need of new homes, which the Government is working hard to provide, so the fundamentals are strong and the property market still presents many attractive opportunities. Second, property has been one of the most consistent, profitable and trusted asset classes in recent times; and, third, British Pearl is not only making property investment accessible but giving people two different ways to invest in it through one platform.”
“We know investors don’t always want all their money tied up in property equity investment, so we’re giving them the option to diversify their portfolio into debt within the same platform. My investment in British Pearl is my own personal vote of confidence.”
Lord Fink's son, Alex Fink, is head of investor relations at British Pearl.