BrickVest, the London-based online real estate investment marketplace, has been granted a Full-Scope FCA Alternative Investment Fund Managers (AIFM) License with cross border passporting rights in the EU by the UK Financial Conduct Authority.
The FCA license, the first granted to an online real estate investment platform in Europe, will provide BrickVest with an EU-wide passport to market and manage a wide range of products across all member states.
It will also enable the firm to grow beyond the EUR100 million assets under management limit that currently applies to small managers. The license also brings enhanced security to BrickVest investors with the introduction of a regulated depositary, extensive disclosure and governance requirements, increased capital requirements, independent valuation and best practice internal operating procedures.
The regime, which came into force in 2011, lays down rules for the authorisation, operation and transparency of managers of Alternative Investment Funds (AIFs) in Europe. The license brings increased investor security to the way that alternative funds are managed and operate, contributing to the stability of the financial system.
Currently medium-sized real estate managers and most electronic investment platforms operate under sub-threshold AIFM or arranger licenses, which restrict their range of activities and size and provide no access to EU passports to market or manage investment products or Alternative Investment Funds across Europe.
BrickVest enables European investors to commit as little as EUR1,000 to institutional quality real estate that previously was only accessible to large institutions such as pension funds, insurance companies and large family offices. It also increases liquidity of real estate assets through its secondary market.
Emmanuel Lumineau, CEO at BrickVest, says: “Being awarded a full scope AIFM License by the FCA is a testament to our commitment to provide a best-in-class real estate investment service. BrickVest is a truly pan-European platform, 79 per cent of our investors are based inside the European Union, including 46 per cent outside the UK. The license will enable us to service investors across Europe. The licensing follows a fantastic year with a series of high level appointments and lays the foundation for strong deal flow across Europe, which we hope will continue in 2017.”
Since its inception, BrickVest has been a strong supporter of financial regulation, enhanced security and transparency in a sector long known for its opacity, lack of governance and ultimately liquidity. The introduction of the AIFMD have been a game changer for the real estate investment industry as the wide definition of an Alternative Investment Fund has captured many open-ended and closed-ended listed and unlisted real estate funds. It has significantly restricted the marketing and management of real estate investment of non-regulated sponsors and small managers while limiting the universe of products available to European investors.
The announcement is another milestone for BrickVest and it also strengthens its ability to be a go-to solutions platform for European sponsors who are looking to structure, distribute and offer real estate opportunities to European clients, especially those that do not have the AIFM set-up.
The company is backed by influential investors from real estate private equity, wealth management and technology including Global Founders Capital, the venture capital arm of Rocket Internet.