VVGV Mini Bonds Overview
The Mini Bonds Issuer
GroupVest has entered into an exclusive partnership agreement with an established London developer Visu Verum to fund the purchase and development of a pipeline of residential sites across South West London and the surrounding region. The individual mini bonds providing funding for this arrangement are called The VVGV mini bonds (the “Bond or Bonds”). These Bonds are issued in tranches or series by the VVGV holding company and deployed, under strict criteria, by tranche into an individual SPVs that develops a portion of the pipeline. In this way each Bond is directly invested into its own portion of the pipeline to segregate and ring fence the security of the investment.
The proceeds from each Bond go towards the purchase costs of the pre-selected site, which has been pre-qualified as suitable for re-development, along with any further development costs that are not covered by a senior lender. The VVGV partnership maintains an equity stake in each purchase of no less than 10% of the amount required to develop each site over and above funds being provided by the senior lender involved.
The Subscription Process
Once subscriptions for a particular Bond has closed the subscription money is held in escrow until the site or sites under consideration for development, or under option to be purchased, is ready to be purchased. At this stage the Bond proceeds are drawn down for deployment into the purchase and development of the SPV acquiring the site. No drawdown takes place until a valuation to support the site purchase or development opportunity has been made.
Naturally, certain risk factors are out of our control, such as the evolving condition of the UK economy or the approach of government legislation to property development over time. More specifically all development is at risk to the fluctuations of demand and supply and the affordability of house prices at any given time. Therefore to mitigate the risks of development we screen and qualify all of our opportunities thoroughly and attempt to develop where demand is greatest and supply is limited, such as for mid-range housing units and larger apartment schemes. If a site or scheme in the proposed pipeline does not meet our stringent criteria to develop we will not deploy bond funds to develop it.