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Dover Wealth Management Services
Protected Property Hedge Fund Overview
The Protected Property Hedge Fund offered by Dover Wealth Markets has been meticulously crafted to grant investors access to the UK Property Market's benefits while mitigating many of the associated risks inherent in direct property ownership. Additionally, this fund extends a 100% capital protection policy, catering to risk-averse clients. It's important to note, however, that opting for the capital protection option entails a premium, thereby reducing potential capital gains. Moreover, this fund is exclusively tailored for institutional investors, with retail investors accessing it indirectly through participation in the Dover Wealth Property Bond.
Advantages of Property Investment
Property investment has historically outperformed many other asset classes and serves as a valuable hedge compared to solely holding funds in equities due to their weak correlation. Nevertheless, direct property investment poses several challenges compared to equity investments, which this fund aims to alleviate.
Challenges of Traditional Property Investment
Prospective investors need to evaluate various issues when purchasing property, many of which carry negative implications. These drawbacks include liquidity constraints, time-consuming processes, associated risks, lack of scalability, and potential knowledge gaps in navigating the property sector.
Liquidity
Property ownership significantly reduces liquidity, as funds are tied up until the property is sold. However, investing in a fund offers continuous access to funds, albeit requiring a matchmaker service to facilitate exits swiftly, with Dover Wealth Financial Services committed to returning funds within 14 working days upon request.
Time
Property acquisition involves a lengthy process of identification, acquisition, financing, insurance, and tenant procurement. In contrast, investing in a fund streamlines these processes, as the management team handles them, pooling funds to identify and acquire properties that yield above-average returns.
Risk
Investing in any asset class carries inherent risks, but property-specific risks can arise, such as structural issues or problematic tenants. By pooling investments, the fund mitigates individual property risks, distributing them across diversified investments.
Scalability
Top-performing property investments typically involve large-scale projects, often beyond the reach of individual investors. However, participating in a fund allows investors to access such projects and benefit from their profit potential.
Knowledge
Investing in familiar territories increases the likelihood of success, hence the adage "invest in what you know." The fund's management team boasts extensive knowledge of the property market, having executed numerous successful developments, ensuring informed investment decisions.
Fund Characteristics
Investing in a property fund offers several advantages over direct property investment, with the fund operating in generic terms outlined below.
Fund Mechanics
Investors purchase shares in the fund, which fluctuate in value over time. Being Open-Ended, investors can liquidate their shares at any time without needing to find a buyer. Additionally, investors may opt for a Capital Protection Policy, providing a payout in the event of a negative fund position upon liquidation, albeit with a 30% profit deduction. Due to the fund's exceptional performance, entry is currently limited.
Investment Portfolio
The fund can invest in any UK-based property project, typically focusing on larger developments with higher upside potential. Leveraging up to 70% from banks, the fund acquires substantial property market exposure relative to invested funds, resulting in robust returns.
Northern Trust Property Bond
This bond offers clients seeking income higher yields compared to savings and corporate bonds, with varying yields ranging from 7.5% to 9.5%. Moreover, a full capital protection option is available with a slightly lower yield.
Fees
A performance fee of 25% is charged on profits generated from investing in projects after deducting all costs.
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