Investment Summary & Purpose
The E+O Property Syndication Capital Fund was established to be an enabler of Erskine Owen property investment schemes. Since its inception in September 2021 it has been successfully doing that by providing finance primarily for the establishment costs of Erskine Owen property investment schemes.
The purpose of the E+O Property Syndication Capital Fund LP (Limited Partnership), therefore is to raise sufficient capital to support Erskine Owen Property investment schemes.
The majority of the activity to date has been:
• Funding for deposits on properties purchased, until such time as the scheme is launched and sufficient equity is raised in order to repay the loan;
• Underwriting equity raises;
• Investing in property investment schemes where an underwrite has been called – until such time as the scheme is subscribed and funds are repaid.
The fund is restricted to lending only to Erskine Owen property investment schemes, and not Erskine and Owen Financial Advisory Ltd. itself. It is not authorised to provide finance for development activities.
There is no cap on the amount of capital that can be raised since the fund needs to be able to respond to the changing needs of the property investment schemes Erskine Owen brings to the market.
Risks
There are a number of risks that could impact the performance and financial returns of the Limited Partnership. Potential, general, and specific risks include, but are not limited to, the following:
Default: Borrowers may default on interest rate payments and/or capital repayments. This could impact on the forecasted returns as well as the value of the investment. This could happen for a number of reasons, and may include but not be limited to reasons such as the borrower not being able to meet its loan obligations if a tenant of a property it owns fails to pay its rent, or the borrower’s cost of bank funding increasing.
Related party: The Limited Partnership will invest in property investment schemes which also have the General Partner as its general partner and are also managed by the Corporate Manager. From time to time each of the General Partner and the Corporate Manager may face conflicts between their respective duties to the Limited Partnership, duties to other property investment schemes they are involved in and their own interests. There is a risk that monitoring or decision-making between various related entities may not be impartial. The General Partner and the Corporate Manager have protocols in place to identify and manage conflicts of interest and related party transactions. Each director and employee has an obligation to act in the best interests of the Limited Partnership at all times.
Liquidity: Loans are not easily saleable to a third party and liquidity is generally dependent on the borrower repaying the loan.
Transfer of Units: While Units in the Limited Partnership are transferable, a buyer for the Units may be difficult to find, and investors may not be able to realise their investments in the Limited Partnership.
Forecasts: Actual results are likely to be different to the forecasts since anticipated events frequently do not occur as expected and the variation may be significant and material. Except for the 5% return guaranteed by Erskine and Owen Financial Advisory Limited, no warranty or representation is made in respect of whether the revenue, expenses, or any capital appreciation in the future will be achieved. Prospective investors should obtain their own independent valuation, legal, accounting, and income tax advice in respect to their own individual circumstances.
Key Assumptions
The forecast return assumes a majority of the raised capital can be lent out to Erskine Owen property investment schemes, or invested in cash at favourable rates.
No taxation is included in the forecast as taxation is for the account of, and responsibility of, a Limited Partner given the legal structure of the Limited Partnership.
Actual results may differ from the forecast annual profit and loss results. The resulting variance may be material. Except for the 5% per annum minimum return guaranteed by Erskine and Owen Financial Advisory Limited, Erskine and Owen Financial Advisory Limited and the General Partner give no guarantee or assurance that the forecast financial results will be achieved.
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