Is collective investment the future?


The world of finance is considered inaccessible to mere mortals, people do not strive to be financially literate and use financial instruments to increase their income. And this happens not through the fault of people, and not even because of the shortcomings of the educational system. If there are not enough relevant offers on the market, people will not be interested in them, they will not want to increase the level of financial literacy. Studying financial literacy requires a practical approach, and in Russia it is provided by the Rentaved team.

Rentaved is a full cycle investment and development company in the field of residential and commercial real estate. Engaged in the implementation of turnkey projects for the construction of new and redevelopment of existing real estate. This company was founded by Ruslan Sukhiy, who also introduced the concept of collective investment in the company’s project activities.

The company develops projects for the construction of residential buildings in suburban cottage settlements or business spaces within the city, seeks investors for the project, seeks and buys land for construction, fully controls the construction process, removing all risks from investors and, upon completion of the project, distributes profits between investors (it can reach 20-35%).

Of the existing projects, Rentaved has already carried out large-scale developments in Moscow and the Moscow Region, St. Petersburg, Sochi, and the Crimea. The total value of the company’s real estate portfolio and land projects exceeds RUB 6.5 billion. And all these projects were implemented through private investment. Collective investments allow market players to participate in the investment process even with a small budget. How does collective investment work and how is it beneficial for the company and for the investors themselves?

First, let’s see what collective investing looks like and how it differs from the usual one? In a standard situation, one or two large investors are looking for a project. This increases competition among investors but does not allow new players to enter the market, for example, who have less funds. Although they may be more conscientious. Rentaved for its projects selects several investors who invest small amounts of money in the project and in the end receive a profit, the amount of which depends on the size of the investment. As we said above, the company assumes all the risks that may be associated with the project, so investor funds are protected. Legally, this takes the form of a closed-end mutual fund. What are the advantages of such an investment organization? This provides risk diversification, the ability to invest collectively (which is the main feature of the Rentaved approach), relatively small amounts of investments that open the way to the investment world for players with small budgets, as well as increased protection of the interests of all investors. In addition, with this legal form, the state is ready to provide the fund with tax benefits.

Secondly, it is beneficial for the construction company. For example, Renitaved often receives offers from large investors, but refuses them, because then all the funds belong to a small group of people, which increases financial risks. Benefits can be observed not only in comparison with a single investor, but also in comparison with cooperation with banks in this matter. As a rule, we are talking about a loan, which is not a reliable and pleasant situation for any company. In addition, banks have their own interests in the transaction and can legally arrange for some of the capital to be embezzled as soon as they realize that the project is very profitable. partly an attempt to get away from cooperation with banks led Rentavid to the idea of ​​collective investment.

Collective investment singled out “Rentavid” in the market of similar projects and even led to the King of records in Russia. The fact is that this company is the fastest growing collective investment fund in Russia, which increases its attractiveness for partners and investors. For the Russian market, this is a real innovation in the field of construction development and redevelopment. Investments in real estate in Russia this year repeatedly “break through the bar”. According to CBRE, over the three quarters, the total volume of investments reached 281 billion rubles (€3.2 billion). This is the highest figure in the history of the market. It took 10 years for Rentavid to achieve this result. Among the latest notable projects: a residential complex with the author’s architecture “White Sail named after I.K. Aivazovsky in Yalta (the project cost was more than 600 million rubles), a premium cottage village in Sochi for 37 villas (worth 3 billion rubles), club houses of Matilda Kshesinskaya and architect Vasily von Gekker – the result of the redevelopment of residential buildings in the historical the center of St. Petersburg (the cost of projects is about 500 million rubles). The company raised money for all its projects, bypassing banks, attracting just the same private investors. As you can see, the result is impressive, which means that the future belongs to collective investments. Here is what the founder of the company says about this:

“Usually, developers sell square meters to investors with their own added value. We offer our investors to earn with us on the growth in the value of the property during construction. We buy land with investors’ money, build it, sell the constructed property, and give them all the income from the project minus our remuneration. This is a revolution in the world of development. If earlier developers were looking for financing from banks, now through collective investments from private investors there is an opportunity to implement large-scale and profitable projects.”

Ruslan Sukhiy and his team are not afraid of competitors. They explain this by the fact that such interest in a new type of investment will raise the overall level of financial literacy in the country, bring the economy to a new level and forever change the field of investment, and they are certainly pleased to be pioneers. The more competitors there are in the market, the more useful their investment method will be.In addition, competition is a normal state for the market, it pushes players to improve their strategies and projects, which again will push the Russian economy forward. According to the founder of Rentavid, it will become much more interesting to work with competitors, new horizons and opportunities will open up.

Currently, the Rentaved company is building a premium cottage village in the Moscow region. It will occupy 35 hectares of land on the 22nd kilometer of the Rublevo-Uspenskoye Highway. 130 private houses will be located on this territory. Variations in area from 359 to 500 square meters are expected. Of course, it is unacceptable to separate a residential area from civilization, so the project includes schools, kindergartens, retail and coworking zones, a commercial structure and other necessary infrastructure. For walking and relaxing, there is a park area with a well-equipped embankment.

Financing of the project will be carried out at the expense of own funds of the investment and development company “Rentaved”, as well as private investments attracted through a closed-end investment fund. The same collective investment that the company used in all its projects. The entry threshold for the current project is 10 million rubles. The investment period is 3-4 years.

The minimum predicted yield will be 100% (from 25% per annum). Under a favorable scenario, investments will bring up to 167% for the entire duration of the project, considering risk discounting.

“We chose Rublevo-Uspenskoye Highway as a location for the new project for a number of reasons.This is both a prestigious location and an area with excellent ecology, infrastructure and transport accessibility. And most importantly, there is practically no new quality supply of country houses, and the demand for them is colossal. Over the past 4.5 years, not a single new cottage settlement has been launched on Rublevo-Uspenskoye Highway. About 85% of real estate sales in the location are in the secondary market. At the same time, obsolete or overvalued houses are often sold here. All this allows us to count on a high return on investment in the project,” said Ruslan Sukhiy, head of the investment and development company Rentaved.

Construction work will begin in April this year, the project will take about 4 years to complete.

investment the future