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How Are Investments Structured At SmartCrowd?

Once a property is 100% funded, SmartCrowd creates an SPV, Special Purpose Vehicle, to form a transparent ownership structure.

The SPV acts as a separate company for investors to become shareholders in it. Each SPV is broken into 1,000,000 shares whereby SmartCrowd allocates your shares proportionate to your investment. For ease of calculation, if a property is AED 1 million, each share of that property is AED 1. In other words, if an investor invests AED 500, then he/she owns 500 shares or 0.05% of the property.

As per the Dubai Land Department requirement, the SPV is incorporated and referenced in the public register of DIFC (Dubai International Financial Centre). It’s all regulated and more importantly, transparent!

SmartCrowd structures investments in this manner for two main reasons:

  1. To hold several owners on the same title deed
  2. To mitigate financial risk in case SmartCrowd ceases to exist
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FAQ's

A Special Purpose Vehicle (SPV) is just a fancy way of saying “a separate new entity” – it’s no different than setting up a new business.

SmartCrowd provides pre-vetted property investment opportunities, transparent data, and gives investors the ability to diversify their real estate portfolios through a secure & regulated real estate investment platform. 

  1. SmartCrowd, a regulated platform by Dubai Financial Services Authority.
  2. Members get access to institutional data and market valuations for free.
  3. You can create a diversified real estate portfolio and start earning passive income almost immediately.
  4. SmartCrowd is entirely Digital. You can invest from anywhere in the world and there’s no travelling required.
  5. Low minimum of AED 500 (approx than $140) to invest in a range of different properties.
  6. It’s hassle-free investing. No personal property management required and you don’t need to be a real estate expert (far from it) 
An SPV is created to isolate and securitize the said property in a separate company. The operations on the SPV are limited to acquistion of the specific property to ring fence the property and isolate the risk of the SmartCrwod platform and other properties. These SPV protect investors from SmartCrowd liabilities as well as protection from SmartCrowd’s bankcruptcy. The SPV is registered with the DIFC and your onwership is recorded on the public register and the SPV is registered with the Dubai Land department providing legal trail of your ownerhsip in the the property via the SPV.

As an investor, you do!

You are the ultimate owner and beneficiary of the property proportionate to your investment amount.

For example, if you invest AED 500 in a AED 1M property, you own 0.05% of that property. The remaining 99.95% is held by other property investors like you! Collectively, you all earn dividends through the property.

Through this mechanism, not only can you invest in an affordable manner, but you can also reduce your risk because you can spread your capital across dozens of properties as opposed to one (i.e., as the adage goes: don’t put all your eggs in one basket!). 

The SPV corresponding to the property investment. 

Since it is not possible to list out dozens of names on a single title deed, the name issued on the title deed (ownership document) is that of the SPV corresponding to your property. Ultimately, you own direct shares in the SPV, which in turn is only responsible for holding the asset that is your investment property and paying out dividends to you.

To see your name as a shareholder, simply go on to the DIFC public register and type the name of the SPV that corresponds to your property.

Typically the name of the SPV starts with the initials “SC” followed by a hyphen and a number. 

If the Total Funding Target is achieved and the Investment Round completes you will be sent a share certificate representing your Shares. If the Total Funding Target is not achieved within the relevant time period, all committed funds will be returned, without deduction of any fees or expenses to your SmartCrowd Account. You can then choose to use the returned funds towards another Property or withdraw the funds from your SmartCrowd Account entirely (the decision is yours!). Please note where you initiate a withdrawal of funds from your SmartCrowd Account via the Platform, we will return your funds to the bank account which you used to fund your SmartCrowd Account. Your SmartCrowd Account is a segregated account operated by Emirates NBD.

At this stage SmartCrowd does not allow for oversubscription. The shares in the investment are allocated on a first come first serve basis

A Material Change means any change or new matter that may significantly affect the value of the Property, the ability to rent the Property, the return on the Property or the value of the Investment. If a Material Change occurs during the commitment period, SmartCrowd will disclose prominently on its Platform details of the material change; notify committed investors of the material change and require them to reconfirm their commitment within 5 business days; and if reconfirmation is not provided within 5 business days, cancel the commitment. If a Material Change occurs after the commitment period, SmartCrowd will disclose such information along with details of the material change, any change in the rights of investors; and what steps, if any, SmartCrowd is proposing to take as a result of such material change.

In the unlikely event that Smart Crowd is unable to operate on a permanent basis Smart Crowd will follow its CP. Where CP is initiated, all investors will be notified via email of the wind-down , provided with their current investment statement and will be asked to use the platform to make a decision of whether to sell at current market levels or hold on to the property. If the outcome of a property’s shareholders is to majority hold the nvestment,the management of the property will be handed over to a predefined Property Asset Manager who will be responsible for administering the SPV, managing the facility manager, communicating with investors and distributing dividend income. If, at the time that the CP is initiated, and the majority decision of investors is to liquidate the investment, Smart Crowd personnel will manage and oversee the sale of Property and the return of funds to investors proportionately less any costs associated.

For a copy of Smart Crowd’s CP please write to [email protected]

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