Private Investor Classifications
 & why we ask you to certify 

 

Why Investor Classifications are important​

Property-backed private lending is not regulated by the Financial Conduct Authority and is subject to UK financial promotion rules. Investor classifications ensure these opportunities are shared only with individuals and corporate entities, that can understand and bear the risks. Although loans are secured against property, security does not guarantee repayment, and lenders may lose some or all of the money they lend.

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Why We Ask You to Certify​

UK law requires property-backed lending opportunities to be made available only to High Net Worth or Sophisticated Investors. Certification allows us to share information lawfully and transparently.

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What are the Investor Classifications?

Here are the UK Financial Conduct Authority (FCA) / Financial Promotion Order definitions you asked about, based on the current regime (with the Government having reinstated the previous thresholds and criteria in March 2024) — which remain relevant for financial promotion exemptions under the Financial Services and Markets Act 2000 (FSMA) and the Financial Promotion Order 2005 (FPO)

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1) High Net Worth Individual (often referred to as 'certified high net worth individual' or HNWI') - * Only applies to individuals, also known as 'natural persons'

​Under the Financial Promotion Order 2005 (Article 48), a High Net Worth Individual means an individual who has signed a High Net Worth Individual investor statement confirming that at least one of the following applies:

 

• Annual income of at least £100,000 in the previous financial year; or

• Net assets* of at least £250,000 throughout the previous financial year.

 

* Net assets exclude the value of the individual’s primary residence, pension benefits, and certain personal rights/insurance benefits. 

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2) Self-Certified Sophisticated Investor:

​A Self-Certified Sophisticated Investor is an individual who self-certifies (by signing the prescribed investor statement) that they meet at least one of the following criteria for sophistication under Article 50A of the FPO: 

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• Member of a network or syndicate of business angels for at least the last six months; or

• Made two or more investments in unlisted companies in the last two years; or

• Worked (past two years) in a professional capacity in private equity or in the provision of finance to SMEs; or

• Currently, or within the last two years, a director of a company with annual turnover of at least £1 million. 

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By signing the statement, the individual acknowledges that they can receive financial promotions that are not approved by an FCA-authorised person and that the individual may lose certain protections (e.g. rights to complain to the FCA or Financial Ombudsman Service). 

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3) Certified Sophisticated Investor (Individuals and Corporate lenders whose directors, controllers or trustees are sophisticated and experienced in property or investment matters - see  further explanation for Corporate investors, below)

​This category is defined separately from the self-certification route and appears in Article 50 of the Financial Promotion Order 2005. A Certified Sophisticated Investor is someone who holds a certificate issued by an FCA-authorised person confirming that they have sufficient knowledge and experience to understand the risks associated with a specified description of investments. The certificate must be signed by an authorised person (e.g. an FCA-authorised firm). 

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• It should state that the individual is knowledgeable enough to understand the risks of the category of investments concerned. Legislation.gov.uk

• The certificate typically remains valid for a defined period (often up to three years, depending on the wording of the certificate and applicable rules). 

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Note: The certified sophisticated investor route is different from self-certification — it requires external assessment and certification by an authorised firm, rather than the individual’s own declaration.

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​​4. Corporate lnvestors - ('non-natural person investors):​

​​​Opportunities are available to 'Sophisticated' Investors, that are corporate entities and where the individuals, controlling the entity are suitably experienced and able to assess the risks of private secured lending.

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Where a private investor is a company, LLP, trust or other non-natural person entity (see list below) eligibility is assessed by reference to the experience and understanding of the individuals who control or manage the entity, such as directors, shareholders or trustees (and trust settlors/beneficiaries). Rather than undertaking individual high-net-worth testing, we consider whether the decision-makers are experienced in property, investment or lending matters and are capable of evaluating the merits and risks of our private secured lending investment. Appropriate declarations, authority documentation and AML checks are then undertaken in order to approve investor eligibility.

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• ​Who controls the entity?

• What experience do they have?

• Are they repeat investors / lenders?

• Are they advised professionally?

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​​​​List of corporate and non-natural person entities ('Corporate Investors')

 

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• Partnership​

• Limited Liability Partnership (LLP)

• Scottish Partnership

• Private Limited Company (Ltd)

• Public Limited Company (PLC)

• Limited by Guarantee Company

• Trust

• Statutory Corporation

• Registered Charity

• Charitable Incorporated Organisation (CIO)

• Community Interest Company (CIC)

• Trust-based pension scheme

• Contract-based pension scheme

• Other - please contact us to confirm

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