Lifestyle -- 5 days ago
Words: Charlie Gardiner-Hill
Buying a house in London is a privilege that, for many, is now less of a dream and more of a dream wistfully viewed down the barrel of a pipe. Every day, thousands of city workers emerge from the Tube clasping copies of the Metro, Evening Standard and the Daily Mail, all of them whipped into an infectious moral panic.
There is now widespread fear that the stories of central London becoming a Russian municipality are a reality and that soon, the only place anyone will ever be able to afford a house will be a suburb of Glasgow, or a converted car park in Milton Keynes. In such circumstances thoughts of a second home, a second income and a suntrap in Spain have become the preserve of the ‘lucky few’.
Enter Rocksure, a company that, in a nutshell, have been quietly revolutionising the ‘second home’ and property investment market. Their collection of property funds offers high net worth individuals a ten-year equity share in high-end property in some of the world’s most profitable property markets.
What makes them interesting is that investors can use their property and a collection of others in the Rocksure portfolio as homes away from home, and at the end of their ten-year agreement those that invest make impressive capital gains on their initial investment.
I find that it’s generally sensible to operate by the much proffered principle that ‘if it’s too good to be true, then it probably is’. So when Rocksure CEO David Rogers told me that “broken down, for the price of a cramped hotel room, you can have the equivalent of a presidential suite”, I was suitably sceptical.
He went on to describe how his burgeoning property fund presents a “unique opportunity to invest a small amount of capital in high end real estate, whilst enjoying your property and making likely capital gains”.
The endearingly rambunctious Rogers has pioneered Rocksure’s Capital Fund, 10 properties scattered across Europe’s most glamorous cities available with a €120,000 investment spanning 10 years, and Crystal Fund, which features six enormous holiday villas in the Carribean and Mediterranean available for a £230,000 investment over 7 years.
Along with business partner Desmond Patrick-Smith, both formerly of Abercrombie and Kent, Rogers has raised over $30 million from 150 investors. Many of those multinational clients are now “rolling over from family holiday villas (of the Crystal Fund) into practical city apartments (of the newly founded London or Manhattan Funds)”.
As he talks about that transition and how investors have found Rocksure to be “a foot in the door of the high quality, high end property market”, it’s clear that behind the entrepreneurial bluster is a maverick streak manifested in the novel nature of his business.
The London Fund is their latest venture and, in terms of its impact on the property market, their most interesting yet. As with all of their properties, the four 1,500 sq.ft London apartments will be luxuriously furnished with a daily maid service. Spread across London’s most desirable postcodes, from Kensington to Westminster, a £250,000 investment will allow investors to use all the London properties for 18 days annually for the whole of the ten year period.
But the real surprise comes at the end of the investment, where normally a company such as Rocksure would pocket a large proportion of the capital gain, in this case any capital gains made during that period will be returned – it’s Robin Hood for the rich. Rogers says that “a reasonable man would expect a 50% capital gain” and he calls this model “dual profit”, which must be Rocksure-speak for ‘magic’.
According to Rogers, The London Fund will see a sea change in investor attitudes, in his words, “previously we have seen lifestyle led decisions with the property as an incentive, in London we expect to see the opposite, property led decisions with lifestyle as a secondary concern.”
It’s a shrewd analysis of the UK’s obsession with owning bricks and mortar, and his pitch that “there is no other way of investing that would be safer and see better capital gains” is hard to turn down. That they expect to have found investors to fill their London Fund within 12 months doesn’t come as a surprise.
The property monoliths will eventually cotton on and get in on Rocksure’s act but until that time; for those with money in the bank, a need for a luxury bolthole in London and a nose for a savvy investment – it’ an opportunity not to be missed.
By Charlie Gardiner-Hill / @CWGHill
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