How does the Cogress model work?
Cogress takes a new approach to property development investment. We connect property developers and investors and unlock previously inaccessible investment opportunities.
Investors get access to both private equity and mezzanine loan investment opportunities that help fund carefully vetted property development projects.
We regularly meet developers and always carry out a thorough due diligence process on them and the projects they present to us. Only if a project passes our rigorous feasibility analysis do we present it to our community of investors, who can pick and choose the projects that most appeal to them.
Investors can invest from £20K upwards. Once invested, they receive regularly quarterly reports and status updates on the project’s progress.
Any returns are paid upon exit.
How does the Cogress model differ to crowdfunding?
The main differences between our model and crowdfunding are:
- Our investment opportunities are offered only to investors who qualify – i.e. those we consider to be sophisticated investors or high-net-worth individuals
- The project will go ahead regardless of whether the funding target is reached, as Cogress underwrite the equity it raises.
- We retain ultimate control over each project by acting as the General Partner.
- We oversee the project through to exit. Our team of Investor Relations Managers provides investors with regular and comprehensive updates.
Are you regulated?
Yes. Cogress Limited is authorised and regulated by the Financial Conduct Authority (FCA) (no. 696171) as a Small Alternative Investment Fund Manager (Small-AIFM).
FCA regulation is designed to protect consumers, enhance market integrity, and promote competition. We are bound by law and regulation to meet the FCA’s required standards at all times, and readily comply with its rules and principles.
Cogress conducts both regulated and unregulated business. Business activities described in the ‘developer’ section of this website are not authorised and regulated by the Financial Conduct Authority (“FCA”).
Who is my Investor Relations Manager?
Every Cogress investor is introduced to an Investor Relations Manager (IRM) who will act as their main point of contact. They will provide information about live investment opportunities and answer any questions an investor may have about their Cogress investment portfolio. If you are not sure who your IRM is, please get in touch with us on: 0203 745 2807. Read more
When was Cogress launched and who founded it?
Cogress was launched in the UK in 2014, following the success of the model at its sister company, Keren Hagshama in Israel. Cogress was founded by Tal Orly, a former solicitor and developer with over 20 years’ experience. Since 2014, Cogress has committed £170m+ for 53 UK property development projects and has an investor community of more than 7,000 registered investors who qualify. Read more
About the Investments
Can I visit the site?
Investors are welcome to visit the site before deciding to invest, or once they have invested and a project is underway.
Please simply contact your IRM to arrange a site visit.
What are Cogress’ fees?
Cogress charges an up-front Set up and Monitoring Fee for each project (typically 6-7%) to cover the costs of due diligence, legal fees and the ongoing monitoring and management of the project.
Where profits have yielded a return of 10% per annum or more for investors, Cogress also retains a proportion of those profits (the Success Fees) depending upon the level of investment, for example:
- £20,000 - £50,000 investment: 20% success fee
- £60,000 + investment: 15% success fee
Note that in all our correspondence with investors, projected returns are quoted net of all fees but not taxes.
How do my investment returns get taxed?
The tax treatment of returns differs per project and is detailed in each investor presentation.
However, this information is provided for information purposes only. Investors remain fully responsible for their tax affairs. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.
Please note that Cogress is not qualified to provide tax advice. If required, we recommend that you seek advice from a qualified accountant or tax advisor on this matter.
Where is my money held?
Any money invested with Cogress is held in a client account in accordance with the FCA Client Money rules up to the point of completion on the purchase of the property. After deduction of the Set up and Monitoring fee, the money is then passed on to the seller’s solicitors to complete the purchase.
Is it a fund?
No. Projects are not grouped together in a unique fund structure. Each project is set up and managed as a standalone UK Limited Partnership, and as such investors have complete control over which project(s) they want to invest in.
How am I updated on my project’s progress once I’ve invested?
Investors receive comprehensive quarterly reports on a project’s progress, prepared by Cogress’ portfolio management team who visit the site on a monthly basis and are in regular communication with the developer.
Who can invest?
Cogress investment opportunities are open to investors who qualify as either a high net worth investor or a sophisticated investor.
If you earn over £100K a year or have net assets (excluding your primary residence or pension) of over £250K, you qualify as high net worth. For further information, read the full qualifying statement (pop up box)
A sophisticated investor is someone who has previous experience of these or other alternative investments. Please read the full qualifying statement. (pop up box)
Cogress investments are open to UK & EEA member state residents. If you live elsewhere in the world and wish to invest, please enquire with us as restrictions vary from country to country.
Unfortunately, US citizens cannot currently invest with us.
Can I take my money out early?
No, it is a non-liquid investment and as an investor you commit to the project for the full duration. You must consider whether such illiquidity might hinder your lifestyle and finances taking into account relevant factors including age. Target Project Duration is only a guide and duration may be longer.
What is the max / min investment?
The minimum investment is £20,000. There is no defined maximum investment, however each investment will have a limited amount of funding being raised, which means there is an upper limit to how much can be invested in a single project.
Can I meet other investors?
Cogress runs regular events on a variety of topics including ‘meet the developer’ sessions, allowing our investors to meet each other and hear directly from the developer of their project. For more information on our upcoming events, click here
How do you select developers and projects?
We are extremely selective when choosing our investment opportunities, typically proceeding with just one in 30 potential projects.
Our analysts conduct rigorous due diligence on each property development, including scrutiny of everything from market conditions to the developer’s expertise and track record.
This research is then distilled and provided to investors in a unique investment presentation. Learn more
Do you reward people for referring friends or family?
Over 30% of our new investors come from the personal recommendations of existing clients. We really appreciate these referrals and have a referral programme that rewards people every time someone they have recommended invests with us. Further information can be found here.
How often do you launch new projects?
Typically, 1 or 2 new projects per month. Cogress focuses on quality over quantity.
What is Cogress’ current investment strategy?
Our current investment strategy typically focuses on multi-unit projects in London and key growth hubs throughout the UK, with capital values below c. £1m per unit and a price per square foot below c. £1,000. These can be residential, mixed-use or commercial properties.
What are the project timescales?
Each project has its own target timescale, which is laid out in the business plan before you invest. The average project duration is 18-36 months (estimated and it may take longer).
What are the typical target returns and when do they get paid?
Cogress typically launches projects that are targeting returns to investors of 16-20%* per annum on private equity opportunities or 13-16%* per annum on mezzanine loan opportunities.
*This figure is only a guide. Level of profit cannot be guaranteed in any way. Past performance is not a reliable indicator of future results.
What is an equity investment vs a mezzanine investment?
When investing in an equity opportunity, investors are taking an equity stake in a project and share any profits* with the developer upon exit (typically in a 50/50 split). The investment is secured* against the title deeds of the property and a personal guarantee from the developer. Equity is subordinate to senior debt and to any mezzanine debt.
When investing in a mezzanine loan opportunity, investors are lending money to the development vehicle and earn returns* on the project in the form of interest, payable upon exit. The investment is secured* with a 2nd or 3rd charge against a property alongside a personal guarantee from the developer. Mezzanine debt ranks below senior debt but above equity holders in the case of insolvency.
*Profit is not guaranteed in any way. Capital at risk. Past performance is not a reliable indicator of future results.
What proportion of total project funding do Cogress investors provide?
Typically, the total cost of a development is funded by three sources; c.70% of the total project cost is funded by senior debt (e.g.: a loan from a bank or specialist lender). Of the remaining 30%, c. 90% is funded by Cogress investors in the form of a mezzanine loan or private equity, and the developer funds the rest. Cogress underwrites the full amount provided by its investors, giving the developer and investors the comfort that the project will definitely go ahead.
How is the investment structured?
When investing in a project, investors become a partner in a UK Limited Partnership that is established for that specific development. Cogress acts as the General Partner of the Limited Partnership, representing the best interests of investors.
In an equity investment, a joint venture is established between the developer and the investors’ Limited Partnership (LP). This joint venture agreement (JVA) establishes the relationship between the two parties and outlines the responsibilities of the developer. Each JVA is investment-specific. Cogress ensures that the JVA terms protect investors' best interests by incorporating mechanisms that mitigate some of the risks of property development, such as delays or cost over-runs.
A special purpose vehicle in the form of an LLP is then established. This LLP is typically 90% controlled by the LP (i.e. Cogress investors) and owns 100% of the property title.
In a mezzanine investment, a special purpose vehicle in the form of an LLP is established which lends to the developing entity.
What information is provided to investors about each project?
Investors receive a detailed Investment Presentation when each project launches, allowing them to make an informed decision about whether to invest.
Investors can also view the following documents (relevant to each investment) via the online Investor Portal:
- Limited Partnership Agreement
- Joint Venture Agreement or Mezzanine Finance Agreement
- Investment Arrangement Agreement
- Key Information Document
Risk and securities
What are the main risks?
As with any investment there are potential risks. Cogress has identified the following main risks associated with property development projects:
- Costs Overruns
- Time Overrun
- Market Risk
- Developer Risk
The Cogress model incorporates various mechanisms to mitigate some of these risks.
What happens if costs exceed the original budget?
Unless approved by Cogress or specified in the Joint Venture Agreement, any cost over-run is the responsibility of the developer.
What happens if the project takes longer than expected?
In equity investments, a penalty / reward mechanism is in place that alters the profit share split between the developer and investors by 1% per month of delay (normally capped at eight months). Conversely, developers are rewarded if the project takes less time than expected.
In mezzanine investments, a penalty interest rate is incurred if the term of the loan is exceeded.
What happens if something goes wrong with the developer?
In equity investments, Cogress investors typically hold 90% of the equity of the development partnership and therefore Cogress, acting as General Partner, has majority voting rights. The developer is obligated to run the project and if the developer fails to meet certain milestones stipulated in the joint venture agreement, Cogress has the right to step in and remove them from their duties.
In this case, we have in-house staff members experienced in property development who have the skills to oversee and run the project.
Alternatively, as a mezzanine lender, the developer can be placed in default if certain conditions of the loan are not met.
What happens if the property market drops?
It is important that investors are aware that their returns are not in any way guaranteed and are dependent upon the ultimate sale prices that can be achieved. Cogress cannot control the market. However, we put in place measures to quantify and minimise the risk for investors
- Our analyst team are particularly conscious that our developments should be based in areas where there is demonstrable demand for the types of property in which we are investing.
- We never add any ‘hope value’ and make our calculations using actual comparable properties that have already sold in the local market as the basis for our exit values.
- In equity investments, we offer our investors a preferred return over and above the developer, delivering the first proportion of profit back to investors before anyone else.
- We do not take a success fee unless the project returns 10% or more per annum.
Do you take planning risk?
No. All our projects have planning permission in place before they are presented to Cogress investors.
What security does the investment have?
An equity investment is secured against the title deeds of the property and a personal guarantee with the developer. Each investor owns a proportion of the property title relative to their level of investment.
A mezzanine investment is secured with a 2nd charge against the property and a personal guarantee from the developer
Are the returns guaranteed?
No. The returns are a projection and are based upon a sizeable amount of investigation into achievable sales prices in an area. As they are a projection, it is possible that the actual return can exceed or fall short of the target. You may lose all, or part, of what you invest. Confidence on sale prices (Gross Development Value) is therefore one of the key considerations that investors should be making before entering into any of the projects.