The investment process
CapitalStackers will liaise with the senior debt provider as appropriate, and then supervise the auction for the remaining finance.
In the bidding centre you will encounter two types of bid: Agreed and Non-Agreed.
The first type gives you the assurance that you and the borrower have shaken on the deal and no-one will come along and outbid you. The second type is subject to the normal auction process and your fellow investors will bid against each other to invest. Each deal can be comprised of one type of bid or a mixture of the two.
You don't need to pre-fund your Standard account to bid in the primary market.
Towards the end of the due diligence process, in anticipation of completing the deal, you’ll be asked to fund your personal eWallet. eWallets have a unique sort code and account number and are accessible only by you. Funds in an eWallet can only be used to participate in CapitalStackers deals or returned to your registered bank account in the event of a deal aborting. Meanwhile, they are monitored by our payment services provider, held and safeguarded by an Authorised Electronic Money Institution (AEMI), both of which are FCA authorised and regulated.
At deal completion, the CapitalStack monies will be transferred through solicitors, who will deal with the formalities and documentation (including making sure the senior debt and borrower equity are in place).
By investing in a scheme, you become a deal participant through Capitalstackers Trustees Ltd (“CTL”) for the duration of the deal (or up to the point you decide to sell in the secondary market).
Because of the need to comply with investment limits, ISA accounts must be pre-funded.
When the auction is complete and the borrower is confident of going ahead, the deal will move into formal due diligence. At this point, CapitalStackers will formally instruct and coordinate the professional team, review all reports coming out of it and post the reports to the data room.
In most circumstances, due diligence will confirm the information posted in the deal room and data room. Occasionally, due diligence may unearth details that affect the previously posted information. If this results in an adverse change to the risk profile, members will be polled and asked to confirm their willingness to invest. If necessary, the borrower will be asked for an additional equity injection or to agree to an increase in the CapitalStack coupon. Any members who decide to withdraw in these circumstances will have their bids cancelled. In the unlikely event that due diligence reveals an insurmountable problem, the deal will be aborted and all bids cancelled.
After completion, CapitalStackers will monitor the progress of the deal and post regular reports to the deal room and data room. Access to this deal information is available only to current investors or temporarily to the wider membership if a participation is published for sale in the secondary market.
Where applicable, CapitalStackers will distribute current interest payments direct to the eWallets. The initial investment and accrued deferred coupon are paid into the member's eWallet upon repayment of the deal by the borrower.
The risks are clearly evaluated with detailed financial modelling“The attraction of CapitalStackers for me is the many years lending experience and contacts of its principals, Steve Robson and Tony Goldrick. This gives investors like myself considerable comfort when participating in property investment opportunities. The risks are clearly evaluated with detailed financial modelling so that it’s quite clear to see whether each risk/reward equation is an attractive one. Investors can draw further comfort from FCA Regulation of crowdfunding platforms and the involvement of the longstanding respected accountancy practice, Hallidays LLP’’
- Graham Prest, Managing Director, Prest Financial Planning