Disclaimers FCA

The information provided on our website, services, or products is not and was never intended to constitute financial, tax, legal, or other advice. This information is for general information about UK property only. All opinions are of a general nature only. Any information provided does not and can never take into account the specific financial situation, real estate investment goals, or  needs of you or any person reading it.

Only invest if you are willing to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Due to the potential loss of invested capital, the Financial Conduct Authority (FCA) considers this investment to be high risk. 

What are the risks?

1. You can lose all your investment

-It is important to remember that you can experience losses related to the real estate market. This means you could get back less than you originally invested. 

-It is important to remember that you can experience losses related to the real estate market. This means you could get back less than you originally invested.

-Real estate-related equity investments are typically made through special purpose vehicles (SPVs) for a specific real estate project. SPVs are usually limited liability companies incorporated in the UK or abroad. Investors in these stocks could lose 100% of the money they invested.

-Many peer-to-peer (P2P) loans are made to SPV borrowers who cannot borrow money from traditional lenders such as banks. These borrowers have a higher risk of not repaying your loan.

-Advertised rates of return are not guaranteed. It is not a savings account. If the SPV borrower doesn't repay you as agreed, you could end up earning less money than expected or even not earning anything at all. Higher advertised profit margins mean a higher risk of losing your money. Some investments can be held in an Innovative Finance ISA (IFISA).  IFISA does not reduce investment risk or protect you from loss, so you could still lose all your money. This simply means that any potential profit from your investment will be tax-free.

-British Pearl conducts due diligence on the SPVs you invest in, such as their expected performance. You should not rely on our appraisal; You should do your own research before investing. 

2. You can hardly be protected if something goes wrong

-The protection offered by the Financial Services Compensation Scheme (FSCS), in relation to claims against failed management companies, does not cover poor investment performance. Learn more about the FSCS Investment Protection Checker here. 

-Financial Ombudsman Service (FOS) protection does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, the FOS may look into it. Learn more about FOS protection here.

3. It is difficult for you to get your money back quickly

-Even if the SPV in which you invest is successful, investment projects may exceed their limits, which may prolong the time your money is locked in the investment.

-The SPV may also face cash flow problems that delay payments to investors. In the worst-case scenario, it could take several years to get your money back (for example, in the case of a block with multiple apartments, sell each apartment sequentially to maximize its value). The SPV could also go bankrupt and be unable to repay the money you owe.

-Dividends are not guaranteed. They are paid at the discretion of the SPV manager holding the assets, depending on the SPV's financial situation. In the worst-case scenario, dividends may be suspended.

-You are unlikely to sell your investment before the stated deadline. You may have a rare opportunity to sell your investment early on the British Pearl resale market, but liquidity depends on supply and demand. There is no guarantee that you will find a buyer at the price at which you are willing to sell, and the price at which you may sell your shares may be lower than the price at which they were originally purchased. Additionally, you may have to pay early exit fees or additional fees to withdraw money from your investment. 

4. Don't put all your eggs in one basket

-Putting all your money into one platform or one type of investment is risky. Spreading your money across different platforms and investments makes you less dependent on anyone for success. Likewise, when investing through the British Pearl platform, we advise investors to diversify their investment(s) across multiple assets.

-A good rule of thumb is to invest no more than 10% of your money in high-risk investments. 

5. The value of your investment may decrease

-Asset values ​​are subject to broader market conditions as well as specific risks - you can learn more about this in our Key Risks section. Your investment is linked to the underlying value of the real estate in your portfolio and therefore the value of your investment may go down as well as up.

-If an investment project is overrun (timeline or cost), the company can issue new shares or increase borrowings. If you do not participate in purchasing newly issued shares, your SPV/ownership ratio will decrease. If new debt is issued, this will increase costs for the SPV. This could mean the value of your investment falls because there are more liabilities to pay or more shareholders to pay.

-The new shares may have additional rights that your shares do not have or may be sold at a lower price than you bought them for. New shares or additional loans can be paid off in advance of existing shares or debt. These new stock or bond/debt issuances may further reduce your chances of achieving a return on your investment. 

If you want to learn more about how to protect yourself, visit the FCA website here.

For more information on investing and lending-based crowdfunding, visit the FCA website here.