Capital Rise Overview
With a management team boasting over 75 combined years of experience working on more than 120 projects globally, there’s plenty of expertise on hand in CapitalRise, an IFISA provider launched in 2016. The firm deals in the very high end luxury London market consisting of very prestigious real estate in iconic locations such as Knightsbridge, Mayfair and Belgravia.
Certainly, this novel business model is proving popular with investors. CapitalRise doubled its investor base in the last year with high demand from both borrowers and investors. The main reason for this is the average investor hasn’t previously been able to access this high value asset class – one that historically has been shown to deliver market returns of 8-12%.
The company is growing too, as evidenced by several new additions to the team in recent months. However that hasn’t helped the firm become profitable just yet. CapitalRise’s most recently filed accounts show a large wage bill and overall company loss. But, it is early in the firm’s development and fairly standard for a start-up such as this not to turn a profit for several years.
CapitalRise is one of only a few of the newest IFISA providers to secure a full five stars out of five on Trustpilot with customers praising the professionalism and highly personalised service offered by the team. The company seems quick to respond to queries and feedback.
The firm has kept a high profile in media outlets with CEO, Uma Rajah, regularly appearing in the financial columns and keeping investors up to date on investment performance, as well as updates on company progress.
- Launched in July 2016
- Over £4.9 million paid to investors to date
- Expected returns of between 8% and 12%
- Minimum investment £1000
- Backing of India’s 4th biggest bank
- Full FCA regulation
- Investor base has doubled in 12 months
- Highly experienced management team
- No fees to invest
- All loans secured by assets
- Loan terms are typically 12-36 months
- Investments can be sold via a bulletin board for a 1.5% fee
- FSCS protection applies up to £50,000 per customer if the CapitalRise business falls into administration, but investors are not covered if a loan defaults.
The CapitalRise Property ISA
CapitalRise offers a range of products of varying risk that will suit most types of investors, offering funds for the purposes of bridging, development and exit finance in the high value property market. Properties tend to be around 66% LTV.
The firm charges no fees on investments, but there is a charge of £35 should you want to transfer your ISA.
With returns to date in excess of 10%, CapitalRise says the reason for its success is its exclusive access to very premium property – real estate that would normally only be reserved for banks, funds and high worth investors.
To back that up, CapitalRise has returned £4.9 million to investors since its formation. Not too shabby at all. What’s more, early investors can take advantage of a refer a friend scheme that returns 1% of your initial investment back to you.
Target Rate8-12% p.a.
Investments are secured with a first or second legal charge over the property asset. If a debtor defaults, investors can collectively force the sale of the property to recoup their investment.
Moreover, the company claims to have a stringent due diligence process with over 50 parameters taken into account. As a result, only 2% of all lending opportunities make the grade. But that’s the type of risk management to be expected when you consider the level of experience of many of the senior personnel at CapitalRise.
In fact, many of the company’s own executives are putting their money into the investment opportunities so that alone is a pointer towards future success.
Since the average gearing on loans is 66%, property prices would need fall by 34% for investors’ capital and returns to be at risk. Additionally, the fund is backed by the family office of Rana Kapoor, founder and CEO of YesBank – India’s fourth largest private bank.
CapitalRise makes it possible for everyday investors to get a small stake in the very top end of the London property market where a single property can cost several million pounds.
Because of the high value nature of these properties, they can be turned over with a profit of several million, so estimated returns of 10% can be viewed as very realistic and even somewhat conservative – as long, of course, as house prices don’t start falling.
Updated: Friday, February 15th, 2019