F.A.Q.
- What is evolve?
- Who are the Directors of evolve?
- Why invest in property assets and businesses backed with property assets?
- How long is the investment tied up for?
- What happens if an investor is desperate to sell his/her units?
- How is each opportunity structured and operated?
- When are such opportunities available?
- What type of debt is utilised?
- What paperwork is involved?
What is evolve?
evolve Fund Services Limited is a London based business formed to facilitate access to commercial and residential property investments and businesses backed with commercial and residential property for private investors with in excess of £25,000 to invest. evolve concentrates on opportunities that are likely to deliver attractive performance within carefully planned structures. Opportunities are thus often very suitable for pension investors. To date more than 600 sophisticated private investors have invested in evolve generated opportunities. As at April 2009, evolve is managing c£130m worth of property for c£40 million of equity. Back to Top
Who are the Directors of evolve?
Simon Hawley is a founding Director of evolve. Simon Hawley BSc (Hons) MRICS was an Investment Director at Hill Samuel Asset Management and Scottish Widows (up to 2000) running the Lloyds TSB Property Pension Funds (c£800m) and the HSAM London and South East Portfolio (circa £1.2 billion).
Prior to this Simon ran the London and South East Property Portfolio for the Abbey Life Property Fund (c£475m having grown from circa £200 million over 3 years) as well as working on a variety of external client mandates.
Simon has over 20 years experience as a commercial property Fund Manager and 23 years experience as a qualified Chartered Surveyor. Simon is a founding Director of evolve.
Hugh Colville is a founding Director of evolve. Hugh Colville BA (Hons), DipSurv, MRICS joined the surveying practice Savills in 1989 and was made a Director of the Commercial Investment Department in 1998. Up to 2000 he was responsible for advising a combination of institutional, property company, corporate and developer clients. He gave advice on the acquisition and disposal of income producing investments and development opportunities (both speculative and pre-let) totalling over £500 million.
Hugh has experience and an exposure to all the property sectors but concentrates on the retail, office, industrial and leisure sectors. Back to Top
Why invest in property assets and businesses backed with property assets?
evolve believes there are three main reasons for private investors to consider investments of this type. The commercial property market in general displays a lack of volatility, investments in this sector can generate attractive performance, and the investments are very suitable for a longer term pension fund approach. Other reasons may include the fact that the investment is a tangible real asset with a ‘bricks and mortar’ wealth preservation factor, it can be re-let if a tenant's lease comes to an end for whatever reason, that the asset can generate a steady income stream, or tax benefits may arise from careful planning Back to Top
How long is the investment tied up for?
It is an accepted fact that property investment is a relatively illiquid form of investment. In addition purchase costs such as stamp duty can be high and thus it is rarely worthwhile viewing the investment with a short-term time frame as the returns over a short period of time are rarely attractive without taking unnecessary risks. Investors in property and businesses backed with property assets tend to adopt a medium to longer-term approach to gain optimum returns from their investment. evolve usually acquires properties whilst adopting a 5 to 10 year business plan. Investors that seek to sell their units or shares by private treaty are unlikely to gain satisfactory results unless they look to retain their investment for the full business plan period. Pension fund investors often have similar longer-term investment horizons. There may of course be an opportunity for the property investment to be sold at an earlier date. Back to Top
What happens if an investor is desperate to sell his/her units?
Although there is no established market for interests in funds, syndicates, collective investment schemes or unlisted shares, any investor that seeks to sell an interest prior to the investment's maturity will be able to contact evolve or the Fund Operator (a regulated business that deals with all the regulatory aspects of the vehicle, partnership or trust). The interest will initially be offered at market value to other investors in the fund, and afterwards to outside investors. A sale cannot be guaranteed but the quality of the investment may mitigate liquidity concerns. Back to Top
How is each opportunity structured and operated?
The ownership structure can vary according to the objectives of the investment. It is often a Limited Partnership (or a Limited Liability Partnership for a trading concern) with each tax paying investor a partner in the partnership. One of the partners will be a Trustee of an Exempt Property Unit Trust. The partnership is operated by a regulated business with evolve forming a general partner (or designated member in the case of a LLP) to conduct the business of the partnership in accordance with a set business plan. The controlling partner then instructs evolve to perform asset management functions with an emphasis on both protecting and enhancing the value of the investment or the business as the case may be. The investors in the vehicle do not participate in the day-to-day business of the vehicle but ultimately they have complete control over strategic issues. The structure is often entirely tax transparent such that there is no taxation within the vehicle and accordingly each investor is responsible for his or her own tax affairs. The regulated operator supplies each investor with a statement at the end of each tax year. Back to Top
When are such opportunities available?
An Information Memorandum for each Fund is circulated when evolve launches a new opportunity, agrees terms to acquire a suitable property investment or prior to the establishment of the business. Applications will normally need to be submitted via an investor's financial adviser within a 3 to 6 week period from receipt of an Information Memorandum. Money transfers to the Fund's account are required within a further month or two. Investors should note that the promotion and operation of such opportunities is regulated by the FSA with strict rules controlling the preparation, accuracy of information and distribution of Information Memoranda. Back to Top
What type of debt is utilised?
It is the fund ‘vehicle’ that borrows from a suitable institutional lender. Bank of Scotland, The Royal Bank of Scotland, Deutsche Bank, Clydesdale Bank and Bristol & West have been participants in previous transactions. The loan is arranged on a non-recourse basis thus limiting the investor's exposure solely to the equity invested. Investors should note that as the vehicle borrows from the lender, SIPP or SSAS pension investors are in fact investing indirectly in property thus enabling a greater level of gearing than may be permitted in a direct route. Back to Top
What paperwork is involved?
evolve sources the opportunity, prepares the Information Memorandum (which is then checked and verified by the regulated promoter and operator), arranges any debt and the Fund formation, and manages the experienced professional team that represents the Fund in the purchase of any property investment. The investor will be required to fill in an application form that is attached to the back of the Information Memorandum. The form requires the investor's adviser to complete some money laundering checks. In addition investors in the vehicle are generally required to sign a power of attorney that enables the operator or Fund to sign documents on their behalf strictly where connected to the set business plan.
Once the Fund is closed the investors receive copy partnership or trust documentation, and thereafter regular reports from the operator and asset manager (usually once a year unless important issues need to be reported). Investors may be invited to attend annual meetings and may contact the evolve Directors at any time to discuss property issues. The process is designed to leave the day to day business decisions from purchase to sale or refinance in the hands of experienced professionals, with strategic decision making such as whether to sell the asset, redevelop, settle a rent review etc. in the hands of the investors typically with a 75% majority required at a vote. Back to Top