[fusion_toggle title=”How do you make sure your investments are indeed safe?” open=”yes”]We are proud of our rigorous screening process, conducted by an analysis team of 15 expert analysts. We conduct due diligence for every entrepreneur, look into his business experience and professional background, and furthermore thoroughly examine the project’s business plan, verify costs and analyze possible failures. Only investments that have met all of our strict criteria will be submitted to the approval of the investment committee and offered to our investors.
In addition, we insist on securities for every investment – such as direct ownership in the property received by each investor with respect to his relative part of the investment, and establishing a separate partnership for each and every investment. All the information is presented with full transparency to our investors, and they receive all the necessary references verifying their ownership of the company holding the property.[/fusion_toggle]
[fusion_toggle title=”Read our full risk warning” open=”no”]Your capital is at risk and you may lose all of what you invest. Investments in property may not be readily accessible and are therefore extremely illiquid. Consult independent advice if you are in doubt about whether our products are suitable for you or if you require tax advice. Consult our full risk warning for more information.[/fusion_toggle]
[fusion_toggle title=”What are the risks?” open=”no”]As with any investment there are associated risks. These can be unforeseen problems during the build, delays, changes to cost or more. We see the main risks to the projected returns and the typical measures we put in place to mitigate them as follow:
- Costs Overruns – Mitigated by an agreement with the developer to cover these costs
- Time Overruns – Mitigated by additional percentage of profit being provided to our investors from the developer’s proportion
- Market Risks – We forecast exit values dependent upon today’s market prices and do not add any expected future value to account for previous years’ growth trends. We also offer our investors a preferred return where they receive their profit before the developer does and both Cogress takes their success fee percentage.
- Developer – We monitor and manage the developer throughout the duration of the project and have the right to replace them should they underperform.
[fusion_toggle title=”How secure is it?” open=”no”]The security of the investment is in the ownership of the property. Once you invest, you will own a proportion of the property title relative to your level of investment. This is achieved through a Limited Partnership structure.
Your capital is at risk and you may lose all of what you invest. Investments in property are not readily accessible and are therefore illiquid. Past performance is not a guarantee of future performance. Seek independent advice if you are in doubt about whether our products are suitable for you or if you require tax advice. Please review our full risk warning.[/fusion_toggle]
[fusion_toggle title=”Is there a guarantee that I will see a return?” open=”no”]No, a return on your investment is not guaranteed. You should consider the risk that the capital you invest may be lost. However, to date Cogress have never lost anyone’s money and will continue to do everything in our power to ensure that this does not happen in the future.[/fusion_toggle]
[fusion_toggle title=”What happens if the developer defaults on his obligations under the contract?” open=”no”]In all of its projects, Cogress are the general partner, holding the majority of the voting rights. Our investors typically hold 90% of the equity of the development partnership, which is managed by Cogress. The developer is obligated to run the project. Defaults on their obligations can include not getting the planning permissions in time or going into liquidation. If this occurs, they will have a certain time limit to correct the issue and if their default is not corrected we have the right to step in and remove them from their duties. In this case we have staff members experienced in property development who have the skills to oversee and run the project.[/fusion_toggle]
[fusion_toggle title=”What happens if the property does not sell?” open=”no”]There are controls in the agreement with the developer to ensure that the properties sell for the right price. If we are unable to reach the price detailed in the business plan, then Cogress will act in the investor’s best interests to target as high a return as possible.[/fusion_toggle]
[fusion_toggle title=”Where is the money held?” open=”no”]Any money invested with Cogress is held in a segregated client account up to the point of completion on the purchase of the property. After deduction of set up and monitoring fee (‘Cogress fee’), it is then passed on to the seller’s solicitors to complete the purchase.[/fusion_toggle]
[fusion_toggle title=”What if the market drops?” open=”no”]It is important that investors are aware that their returns are dependent upon sale price that can be achieved for properties being developed. Cogress, despite our best intentions, cannot control the market however we put in place a number of factors to hopefully quantify and minimise the risk for investors:
- Our analyst team are particularly conscious that our developments should be based in areas where there is specific demonstrable demand for the types of property that we are building
- They deliberately select the projects based upon the stability of the area to movements in price.
- We never add any ‘hope value’, only using comparables that have already sold in the local market as the basis for our exit values.
- We offer our investors a preferred return over and above the developer delivering the first proportion of profit back to investors before anyone else
- We have a hurdle rate of investors return of 10% / annum before which we do not take a success fee
[fusion_toggle title=”What if something out of the control of the developer goes wrong?” open=”no”]Risks out of the control of the developer (force majeure) are part of the risk that investors will take as an equity partner in the development. However, we work with a professional team of developers and it is in everyone’s best interest to mitigate risks and make up for lost time or other issues as and when they arise.[/fusion_toggle]
[fusion_toggle title=”What happens if the development goes over budget?” open=”no”]Cogress has a clause in its joint venture agreement (JVA) with the developer to cover cost overrun. Cost overrun JVA clause:
The Developer shall procure that no Cost Overrun shall occur without the prior written approval of the Investors. Unless otherwise agreed in writing between the Developer and the Investors, in the event that any Cost Overrun shall occur with or without the prior written approval of the Investors, then the Developer shall assume responsibility for that Cost Overrun, and shall indemnify the Investors and the LLP and keep them indemnified and held harmless against the same. In addition to any other remedy available to the Investors, to the extent that any liability of the Developer arises pursuant to this clause which has not been discharged, the Investors shall be entitled (but not obliged) to deduct and appropriate such amounts from any amounts that would otherwise be due to the Developer from the LLP pursuant to clause 6 or 7 or otherwise.[/fusion_toggle]
[fusion_toggle title=”What happens if the return is not as expected?” open=”no”]The returns are a projection based upon a sizable amount of investigation into achievable sales prices in an area. As they are a projection, it is possible that they can exceed or not exceed expectations. Confidence on sales price (Gross Development Value) is therefore one of the key considerations that investors should be making before entering into any of the projects.[/fusion_toggle]
[fusion_toggle title=”What happens if the development takes longer than expected?” open=”no”]Cogress has a Penalty / reward mechanism clause as part of its joint venture agreement (JVA) with the developer to delays with the development.
Penalty / reward JVA mechanism:
Where the Base Return Date is a date other than the Target Completion Date:
for each full calendar month that the Base Return Date precedes the Target Completion Date, the Standard Investor Profit and Standard Developer Profit shall be adjusted so as to increase the Standard Developer Profit by £18,068.61, up to a maximum aggregate adjustment of £144,548.88, and so as to decrease the Standard Investor Profit by the same amount;
for each full calendar month that the Base Return Date follows the Target Completion Date, the Standard Investor Profit and Standard Developer Profit shall be adjusted so as to increase the Standard Investor Profit by £18,068.61, up to a maximum aggregate adjustment of £144,548.88, and so as to decrease the Standard Developer Profit by the same amount; and pro rata adjustments shall be made for any part of a calendar month.[/fusion_toggle]