Equity Frequently Asked Questions

How is the investment structured?

Every project is set up under its own Special Purpose Vehicle (SPV), which is a UK Limited Company registered with Companies House. Investors acquire shares in that SPV thus becoming a shareholder in that project and benefitting from shareholders rights; thus securing their investment and sharing in the eventual profits once the development is sold.

How are the project funds held?

Investor contributions are held in an escrow account overseen by a third party escrow agent. Funds are released only when an Independent Monitoring Surveyor (IMS) issues a payment certificate to pay the contractor and professionals only on reimbursement terms, meaning the cost to complete the budget remains in place throughout.

How does Rise Capital mitigate risk for equity investors?

Rise Capital employs a debt-free syndicate model, where project costs for construction, professional fees and contingency are fully funded by private investors. As a result, there are no third party lenders or charges involved therefore removing the risk to equity investors (sitting behind the debt free syndicate model) of a third party lender acting irrationally or trying to profiteer from putting a facility into default.

What returns can I expect from a joint venture equity property investment?

The capital stack for each project is set as 75% loan to gross development value (LTGDV) and 90% loan to cost (LTC). Equity investors put in 10% of the remaining costs for 40% of the development profits, secured by way of 40% of the shares of the SPV (that owns the project) and a shareholders agreement setting out the reserved matters. As a result, equity investors are benefiting from third party debt-free leverage, thus generating a higher return on investment without the risk of a third party lender acting irrationally or trying to profiteer from putting a facility into default.

Who holds the first charge on the property owned by the SPV?

A Security Trustee holds the first charge on behalf of the debt free syndicate investors with equity investors sitting in behind without the risk of third party lenders acting irrationally.

Why do the debt free syndicate investors hold the first charge?

By way of reminder, within each project’s capital stack, debt-free syndicate investors cover 90% of the total project costs so given they are providing the bulk of the funds, they are first in line to be repaid first.

How does Rise Capital’s model solve the long-standing problems caused by third-party lenders?

For over 30 years, UK property developers and their investors have been exposed to the risks of unfair lender practices — including: Sudden funding withdrawals, excessive fees and default interest, appointing receivers to take control of assets and forcing fire-sale exits that harm both developers and investors

Rise Capital’s model removes these risks entirely by eliminating reliance on banks or mezzanine lenders. Instead, the funding is raised directly from private investors via the Debt-Free Syndicate model or a Shariah-compliant Murabaha agreement.

This means: No third-party lender can take control of the project, no aggressive enforcement or forced receivership, all capital is protected through escrow, independent oversight, and reimbursement-based drawdowns

This structure is a genuine solution to a legacy finance problem, providing investors with stability and transparency, and giving Rise Capital the breathing room to deliver value without fear of what a third party lender is going to do.

How are investors kept informed on project progress?

Rise Capital provides regular monthly webinar updates on milestones, financial developments, and overall project status. We value transparency and aim to keep investors informed at every step.

What is the typical project timeline?

Most projects conclude within 18 to 24 months. This timeframe includes construction and any post-construction sales activity (known as the sales period).

Can international investors take part in Rise Capital’s joint venture projects?

Yes. Rise Capital welcomes international investors who meet our eligibility requirements and comply with local regulatory obligations in their own jurisdictions.

How does Rise Capital’s model align with Shariah-compliant investment principles?

Our equity structure avoids the use of interest-bearing debt, making it a viable option for Shariah-compliant investors. The model is fully equity-funded and asset-backed. See Shariah-compliant FAQ’s.

What happens when a project is completed?

After the project and its units are sold, profits are distributed proportionately to investors based on their shareholding in the SPV. This is when investors receive both their original capital and accrued returns.

When do I receive my profit distribution?

After the completed properties are sold, the SPV distributes profits. Equity investors receive their return based on the agreed waterfall — typically after the Debt-Free Syndicate capital and fixed return are repaid.

How does the rental fall-back option benefit equity investors?

If the completed properties do not sell within 3 months of practical completion, the rental fallback strategy is triggered. This allows the SPV to let out the properties, generating rental income instead of selling into a soft market.

The benefit for equity investors is twofold:

The interest rate payable to the Debt-Free Syndicate investors reduces to 4% p.a., similar to a buy-to-let mortgage, lowering the SPV’s cost of capital.

Net rental income (after covering the 4% return and operating costs) is distributed quarterly via declared dividends to equity investors, pro rata to their shareholding.

This approach protects your long-term profit potential by avoiding forced sales and provides ongoing income until the market is strong enough to support full-value exits — preserving the target return without dilution.

What if I want to exit early?

Equity shares are not liquid and are typically held for the full project term. Early exit may be possible via a private resale of shares, subject to Shareholders’ Agreement terms and Rise Capital’s approval (which won’t be unreasonably withheld).

What governance rights do I have as a shareholder?

C Shareholders (equity investors) are protected by a detailed Shareholders’ Agreement with defined reserved matters. This includes voting rights on any material deviation from the Business Plan, giving you legal oversight.

How does Rise Capital achieve sales in the residential sector?

Rise Capital is a member of OwnNew (https://ownnew.co.uk/), a platform that enables end-user buyers to access the cheapest mortgage rates in the UK.

Through this partnership, Rise contributes 3% of the property value as a homebuilder incentive. This contribution is passed directly to the buyer’s mortgage lender, which then offers the buyer a significantly reduced mortgage rate — typically the lowest rate available in the UK on a 2-year or 5-year fixed product.

This strategy improves affordability for buyers, accelerates sales, and increases the likelihood of timely exits — benefiting all investors in the project.