Tag Archives: crowdfunding

Times of uncertainty demand investments that protect capital

Special Advertising Feature

As the financial centre of Asia, and as a small and open economy, Singapore is affected by the slowdown of Asia’s economies, led by the volatility in the Chinese market and current global uncertainty. As a result, the Monetary Authority of Singapore (MAS) has eased its monetary policy for the third time in 15 months, setting the Singapore dollar’s nominal effective exchange rate at zero percent, in turn stabilising the expected appreciation of the Singapore dollar.

It isn’t clear if a financial crisis is on the cards, but when faced with such a possibility, governments are not alone in taking preventive measures. Seasoned investors also take precautions by seeking refuge in lower risk assets. This phenomenon, known as the flight to quality or flight to safety, is where investors move their capital to safer investments, such as US Treasury bonds, gold, or tangible assets in strong currencies. 2016 is turning out to be a year marked by instability, and this has increased the appetite for such assets.

Real estate investments in prime markets are one of the most attractive alternatives right now. This was the general consensus of expert investors in an annual survey conducted by the Association of Foreign Investors in Real Estate (AFIRE), in which over 60 percent of its members said they saw 2016 as a year to increase investment in these types of US projects (Read more on Bloomberg). The survey also ranked New York as the most sought-after location, as it was the city that generated the highest returns in 2015, and prices are expected to appreciate the most over the next few years.

Investing in prime real estate in a city like New York has always been synonymous with investments that could only be made by millionaires or financial institutions. However, thanks to crowdfunding, global investors can now access such opportunities. Through this innovative model and with the benefits of technology, the small investments of thousands of people are pooled together in order to attain the amount required to acquire these assets, which range from US$100 million to US$250 million.

The company that is currently making this possible is Prodigy Network. Headquartered in New York, the city where it develops all the projects it crowd-funds, this innovative company has raised more than US$150 million in equity from small investors in 23 countries over the past three years. Together with traditional financing, the capital has financed the development of a portfolio of four projects in New York, valued at approximately US$650 million.

The company, which is the leading real estate crowdfunding platform in the USA, will hold a seminar on 4 May at the Four Seasons Hotel in Singapore on Real Estate Crowdfunding in New York. Industry pioneer and CEO of Prodigy Network, Rodrigo Niño, will share the benefits of this model to investors in Singapore who wish to access New York’s real estate market.

Reserve your spot here.

Prodigy Network’s effectiveness has already been verified by hundreds of investors who have participated in its AKA United Nations project, a building comprising 95 luxury apartments. Located in Manhattan, one block away from the headquarters of the United Nations, this project was liquidated last January, generating pre-tax annual returns of 31 percent.

Currently, Prodigy Network is running a crowdfunding campaign for its latest project, The Assemblage / 25th Street. Located in the neighbourhood of Nomad, this will soon become a 12-story building containing co-working spaces, which have been growing more than 80 percent annually since 2011. Investors from around the world can still participate in the last funding stages of this project, and earn double digit returns.

If you are interested in learning more about the benefits of real estate crowdfunding and how to access NYC’s prime commercial real estate market, do attend Prodigy Network’s seminar on 4 May.

  • Event: Seminar on Real Estate Crowdfunding in New York
  • Speakers:
    • Rodrigo Niño – CEO and Founder of Prodigy Network.
    • Leonard Chinchay – VP Investor Relations, Prodigy Network
  • When: 4 May 2016
  • Place: Four Seasons Singapore Hotel
  • Time: 6:30pm

Property crowdfunding catching on

A new property crowdfunding platform called FundPlaces will launch in Singapore later this month joining two existing players – CoAssets and DomaCom, revealed media reports.

In a nutshell, property crowdfunding is the practice of sourcing capital needed to start a real estate development from a large group of people, usually via the Internet, while crowdfunding platforms help to connect investors with those developers who need cash.

Although these platforms provide smaller developers with a quick and efficient alternative source of capital, many home builders here still prefer the traditional means of raising funds like issuing notes, taking bank loans, or listing on a stock exchange.

One key concern over crowdfunding platforms are the vague rules as the Monetary Authority of Singapore (MAS) has yet to issue a clear framework governing the practice.

Another issue is the high risks, like failure of a development due to a company’s negligence, investors not being able to encash their securities and non-fulfilment of the promised returns.

Nevertheless, crowdfunding platforms in Singapore vigilantly perform various checks to ensure that a developer fulfils its pledge to investors.

For instance, FundPlaces requires developers to provide the necessary documents for inspection by prospective investors, while DomaCom makes sure that a property fund is registered with MAS, or by Australia’s ASIC. For CoAssets, the developer must have an office in Singapore and a local director who would be held liable in case of a default.

“For most projects, we can’t guarantee they won’t fail,” said FundPlaces co-founder Tan Kok Keong.

“That is a risk that all investors have to take. But we try to mitigate that risk by working with people who have shown themselves to be good paymasters, who are proper business people and have credible backgrounds,” he added.