The MoneyLab Blog

Happy 10th birthday Sapphire!

Posted by Boyd Carson, Sapphire Capital on 25-Nov-2019 20:14:18

Sapphire is ten years old today.

What a journey it has been. My wife and I started Sapphire in our top floor spare bedroom in a suburb of Belfast. The odds were stacked against us. We worked from there for years and only moved out when Johnathan (our first employee) joined us, and it was too embarrassing to ask him to walk through our house to the top floor to get to his work desk. Just as we were starting, the financing crisis hit, and our first fund was – let’s say – a baptism by fire. It took years to recover. But as any entrepreneur who has been through hard times will tell you – with hindsight the experience proved fortuitous. We learnt from our mistakes and changed direction. Ten years later, we are now one of the leading advisers in SEIS & EIS, manage 25 venture capital funds which have invested in over 100 companies - and thankfully Sapphire continues to grow daily.

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Topics: Investment Funds

Jersey Expert Funds - 6 Key Questions to Ask

Posted by Boyd Carson, Sapphire Capital on 04-Jul-2013 16:28:00

Jersey Expert Funds are an excellent way to allow investors and the promoters of funds to take advantage of the streamlined process for establishing a new fund in Jersey.  Introduced in 2004, Jersey Expert funds are particularly attractive when there is a need to create a flexible investment structure which is targeted at high net worth, professional, sophisticated and institutional investors as well as hedge funds.  Sapphire Capital have advised numerous Expert Funds and most recently structured and promoted a Jersey Expert Fund which seeks to purchase UK distressed residential and commercial property.  We found it to be a fairly straightforward process.

Although the Expert Fund classification has reduced the regulatory burden which in turn has resulted in creating a more flexible fund structure, the funds do need to be established in accordance with a strict step-by-step process. 

From our recent experience of setting up Jersey Expert Funds, here are the six key issues that you should keep in mind if you are considering setting up a Jersey Expert Fund.

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Topics: Investment Funds, jersey listed funds, Jersey Expert Funds

Jersey Listed Funds - an excellent fund alternative

Posted by Boyd Carson, Sapphire Capital on 27-May-2013 13:16:00

If you are looking for fund options, a Jersey Listed Fund needs to be at the top of your consideration list.  This streamlined process relating to the Jersey Listed Fund applications results in it having a quick turnaround time, a simple verification process and no regulatory review if your principals meet the requirements for self-certification.  It is available to companies only at this time, but is likely to be extended to limited partnerships and unit trusts established in Jersey.

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Topics: Investment Funds, jersey listed funds

Crowdfunding real estate - what would Thatcher have said?

Posted by Michael McDowell, Sapphire Capital on 21-Apr-2013 20:25:00

The majority of large property deals in the UK are transacted by a handful of institutional investors or very wealthy people.  As Thatcher’s legacy is currently being closely examined, the obvious question is what would Lady Thatcher have thought about this new way to invest in real estate?  Surely she would want everyone to have the opportunity to share in this market?

This is already happening overseas.  In Colombia, for example, they have built the first crowd funded sky scrapper.  A company was formed to build Colombia’s tallest building.  A high profile advertising campaign was launched encouraging everyone  - from doctor to barbers – to invest and share in Bogata’s regeneration in return for a share in the profits.  Hard to believe I know - for those of you who doubt - watch the clip below:

Colombia sky scrapper funding by Crowdfunding

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Topics: Investment Funds, Crowdfunding, Financial Services, FCA, Alternative Investments, commercial property sector

Crowdfunding comes to the commercial property sector

Posted by Michael McDowell, Sapphire Capital on 11-Apr-2013 13:10:00

Individuals rarely purchase commercial property, it’s usually a pension fund, an investment company or an institutional investor.  What they have in common is that they put lots of different people’s money into a company structure that then buys the property and shares the proceeds.  To put it another way, it’s Crowdfunding – but – the crowd don’t always know what they are investing in and there in lies the problem.

Many would argue that property and the banks crashed because funds had targeted high yielding but extremely risky portfolios to make up short falls in other under performing assets.  The problem in my view is that investors didn’t always see the whole portfolio, so the crowd was kept in the dark and didn’t see the crash coming.

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Topics: Investment Funds, Crowdfunding, investing, Property Investment Funds, commercial property sector

New Investment Funds - the one key question to ask every time

Posted by Boyd Carson, Sapphire Capital on 15-Jan-2013 22:11:00

One of our core advisory services is structuring investment funds for clients. Thankfully, there are not many structures that we have not come across.  From collective investment schemes to unit trusts. From limited partnerships to open ended investment companies.  I could go on but you get the point. There is no end of investment fund structures to choose from and I haven't even mentioned the offshore variations. 
So what structure is the right one? Simple answer.  The one that has the greatest possibility of being funded. It is obvious to state that structuring a fund that has a limited possibility of receiving investors money is a waste of time.  But you would be surprised how many investment managers get caught up in the mechanics of the fund structure. The different tax structures, offshore versus onshore is obviously important. But the starting point is always to ask the one key question - where is the money coming from? Answer this and you have the fund structure.
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Topics: Investment Funds, Property Investment Funds

Crowdfunding sees the banking crisis as an opportunity with danger

Posted by Michael McDowell, Sapphire Capital on 08-Jan-2013 19:55:00

The Chinese symbol for crisis is danger and opportunity.  The crowdfunding sector viewed the 2008 banking crisis in this way.  An opportunity opened for those with capital to fill the credit void left by banks and government to assist businesses (start-ups, smes or larger organisations) with loans or equity investments to help them grow or expand.

There was of course danger; can these crowdfunders with a presence solely on the world wild web, effectively represent entrepreneurs looking for funding and those wanting to invest?

It looks like they can:

There are a total of circa 536 crowdfunding platforms operating world wide.

These platforms raised circa $1.5bn in 2011 with $2.8bn estimated for 2012

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Topics: Investment Funds, Crowdfunding, Financial Services, IFAs, Finance Act 2012, Alternative Investments

What do IFAs really want to see in a fund?

Posted by Boyd Carson, Sapphire Capital on 12-Dec-2012 23:28:00

Over the last six months, Sapphire Capital has been meeting with prominent Independent Financial Advisers to find out what the IFAs really want to see in an investment fund. Having seen our fair share of funds that failed to launch we are keen not to suffer that painful (and very costly) experience - so a little bit (actually a lot of) market research was called for.  Quite simply, we wanted to find out which funds they would promote to their clients and which ones they would ignore.

The results were both clear and unsurprising. 

Here are our top five findings:

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Topics: Investment Funds, Financial Services, UK Financial Services, IFAs

Why do we need the UK financial services industry?

Posted by Boyd Carson, Sapphire Capital on 08-Dec-2012 18:54:00

The UK financial services industry employs over one million people in the UK and accounts for circa 5% of our national output.  London has over 30% of the global currency trading making it a world leader in forex trading.  What is all this based on?  How did it get so large and what role does the UK financial services industry play in our economy?

Our economy is based on the flow of money - it is the medium of exchange in our society. Rather than using the bater system, using money permits us to divide it into smaller units, such as pounds and pence, as well as being acceptable by both sides in a transaction. In our complex monetary economy there is a large variety of transactions that involve money and one of the best examples is debt - which measures the claim of one person over another. The UK financial services covers all the activities with the monetary economy. 

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Topics: Investment Funds, FSA, Financial Services, UK Financial Services

Real Estate Investment Trusts - Old Dog - New Tricks?

Posted by Blog Tipster on 29-Nov-2012 11:00:00

A Real Estate Investment Trust (REIT) is broadly a company that owns and operates income-producing real estate or real estate-related assets.

UK REITs are now able to offer (post-Finance Act 2012) a cost effective, tax efficient solution to the problems faced by institutions and companies with large property portfolios and liquidity issues. At least potentially, a UK REIT should be a method of raising money to assist the  depressed property market. This is certainly what HM Treasury is hoping to achieve in  the amendments to the Finance Act 2012. As a result, it should now be easier, in theory at least, to set up a UK REIT. However, only time will tell.

I recently discussed five particular questions pertaining to REITS in the UK with Mark Fahy of the London Stock Exchange and a number of other professionals from the world of property. The questions will follow with a explanation of the answers we jointly came up with.

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Topics: Investment Funds, Finance Act 2012, UK REITs