Prospective Investors should consider the following risk factors, in relation to the investment opportunity, which individually or in aggregate could have a material adverse effect on the investment.
The information set out below does not purport to be an exhaustive summary of the risks affecting the opportunity. Prospective Investors should carefully consider whether an investment in the opportunity is suitable for them in light of their circumstances and financial resources.
There is no right to compensation in respect of poor performance.
The opportunity is dependent on the skills and experience of the directors of Oaksmore and the asset managers and may be adversely affected if their services or the respective services of any of their key personnel cease to be available to the Issuer and the SPVs.
Past and future performance does not imply that future trends will follow the same or similar pattern. Forecasts made may not be achieved. Your capital is at risk.
Inflation/deflation is an economic risk that can erode the value of any investment.
There is currently no established secondary market for the bonds. It may be difficult for an investor to sell their bonds at an acceptable price, or at all. You should be prepared to hold your bonds for the full term of the investment.
Take Professional Advice
This is a fixed term investment and you are effectively tied into it for the full term. In any event you should not enter into this arrangement unless you have taken financial advice from a qualified professional who has assessed your overall financial situation and particularly your exposure to risk.
The regulatory environment is evolving and changes therein may adversely affect the opportunity. In addition, the regulatory or tax environment is evolving and may be subject to modification by government or judicial action, which may adversely affect the value of the investments held. The effect of any future regulatory or tax change on the opportunity is impossible to predict.
The basis of taxation, including the rules relating to ISAs, is subject to change.
UK Property Market
Real estate investments can perform in a cyclical nature and values can increase or decrease. Economic, political, foreign exchange and legal issues can affect values as they can with any other investment. Any future downturn in the UK real estate market could materially adversely affect the opportunity.
Investments in real estate are relatively illiquid and therefore may be difficult to realise.
Your investment return is dependent on the Issuer generating sufficient profit to repay the interest and capital under the bond. Its ability to do so depends on a wide range of factors relating to the property market (property prices, availability of tenants, etc) and the wider economy. The capital you invest is therefore at risk and interest and capital returns are not guaranteed.
The costs of managing your ISA are met by the Issuer. However, the ISA manager charges fees for transfers out of your ISA and administering your ISA in the event of your death or bankruptcy, as set out in the ISA terms and conditions.
Concentrating your risks
You can only open an Innovative Finance ISA in respect to a particular tax year. As you may not be able to sell your bonds quickly, you should not invest a high proportion of your investment capital in them. Many investment advisers recommend that investors should try to avoid investing more than 10% of their net assets in non-readily realisable securities.