Property syndication – who can participate?
You may have recently read our updates about the property syndication opportunities we have been offering. While syndication is an attractive proposition, particularly for investors who are not able to or may not wish to invest in property alone, there are some considerations on who can participate. The main consideration for syndication subscribers is that you qualify as a “wholesale investor”.
Wholesale investor is a term used in the Financial Markets Conduct Act 2013, to describe a person (or business) with a good understanding of different investment vehicles and how they work.
There are four ways to qualify as a wholesale investor: an eligible investor, investment activity, large investor or investment business.
- Eligible investor. If you’re an eligible investor, you can demonstrate you have the requisite experience in buying and selling financial products and are able to make informed decisions about the benefits, risks and values of different investment types. You will understand the type of information you need before making a decision to invest and will be able to assess when you need to know more. If you qualify as an eligible investor, you will also need to supply confirmation of certification, which is completed by a lawyer, registered accountant or authorised financial adviser.
- Investment activity. You can show that within the past two years you’ve been involved in significant investment activity. This means you have owned a financial portfolio worth at least $1 million, or you have carried out transactions to buy financial products worth $1 million or more. Under the investment activity criteria, you may also have worked for an investment business within the past ten years, and for at least two years during that time, been involved in investment decision-making.
- Large investor. Your net assets or consolidated turnover over the past two financial years is $5 million or more.
- Investment business. If you have a professional certification or experience that shows in-depth financial knowledge you could qualify under these criteria. For example, you could be an investment manager, registered financial adviser, broker, underwriter or licensed insurer.
Our experience to date is that most people are qualifying under the Eligible Investor category. If you have had experience buying and selling property in some way shape or form there is a strong possibility you will qualify. To find out more email firstname.lastname@example.org or visit the Financial Markets Authority website to find out more about wholesale investors.