Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You won't get your money back quickly

  • Even if the business you invest in is successful, it will likely take several years to get your money back.
  • The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
  • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The value of your investment can be reduced

  • If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
  • These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.

Investing Capital

An introduction to property investing: 4 key concepts

As our regular readers will know by now, we are supporters of property investment and have produced a number of guides and webinars on the topic, as well as a large number of articles on our blog.

While we try to help you become familiar with all aspects of property investment, there are still a lot of terms we use when talking about property investing which may be unfamiliar unless you're investing regularly.

One such group of terms that we have used recently in our introduction to property investing webinar and guide to 'integrating property investments into your portfolio' is the concept of Core, Core+, Value Added and Opportunistic.

The basics

This group of terms are collectively used to describe the different investment strategies or styles that can be employed when investing into commercial property.

Each strategy takes a different approach to the risk/return profile, investment approach and management style. Therefore understanding these terms is important for investors to ensure they appreciate how their investment will be used, the risk they will be exposed to and what potential return is achievable.

These terms are most often used when considering indirect investment into commercial property through an investment structure such as a fund, Real Estate Investment Trust ('REIT') or other investment vehicles. In this case the investor invests their capital in the investment structure, which then holds the assets, making the investment into the property on behalf of the investors.

There is, therefore, a need to specify the nature of the property that will be invested into, both in terms of the risk/return profile and management style, which is provided at a glance by these terms.

As we have also been discussing a lot when we talk about property investment, there is the opportunity for either income or growth when investing into property. This is also a differentiating factor for these strategies, allowing investors to understand the return profile and timeline to expect from the investment.

The detail


This is the most stable and lowest risk strategy. Core investments are usually high quality, relatively liquid assets, which provide an income. This income is generally backed by a strong track record and has a long forecast duration, providing a high level of security. Most often this investment is unleveraged, so has limited percentage downside risk while limiting the upside percentage gains available.

However, while providing secure and predictable income, there is very little scope for growth. Core property is usually already high quality or grade A property, with tenancies in place, therefore the scope for asset management to improve the value of the property.

Investment / return graph for Core property investments showing unleveraged, upside and downside outcomes" title="Investment / return graph for Core property investments showing unleveraged, upside and downside outcomes

An example of a core investment would be an office block which is already let to a large, established organisation, with a long term lease and upwards only rent reviews. This would provide a long term, predictable rental income with high security. 

Core Plus

Core plus, as the name suggests, is broadly similar to Core but with additional scope for growth. While still focused on income, this will potentially be of a lower quality, or with a higher level of available capacity. This means there is scope for asset management, whereby the property can be improved and contracts can be negotiated to better terms increasing the value of the property.

This can bring with it the potential for a higher rate of return in total, once the income is taken into account and any growth achieved. However, with this increased potential return and scope for growth there will be a less predictable, possibly lower, income and a higher level of associated risk involved.

Value Add

Some sources will refer to Core and Value Add interchangeably and will only refer to the three styles of investment strategy. However, Value Add will most often be more focused on adding additional value to a property with some income, whereas Core plus is essentially Core will some potential for adding value. These are therefore better thought of as contrasting strategies.

Value Add will seek to invest in properties where there is a higher scope for improving the assets through renovation or redevelopment, but a limited amount of income already in place. This has a slightly higher risk profile than Core Plus, as there is a lower level of income already in place - but the potential for return is also slightly higher, as the value of the whole property can be improved and then let out for an income, as well as adding to the scope for return.

For example, this could be a lower grade office block that has a reduced occupancy, which could be bought and renovated. This would allow the office to increase the rental rate, bringing an income in the short term and once near capacity can be sold on as a Core or Core Plus investment to realise the growth.

Both Core Plus and Value Add can be seen as occupying the middle ground between growth potential and predictable income. They therefore also both occupy the middle of the risk/return profile, though in a slightly different way. To help offset this risk, leverage might be used to limit the maximum amount of capital at risk, though increasing the percentage risk and return potential on the investment.


This final approach is the highest risk approach to commercial property investment, but there is also high potential for return through growth. This approach seeks to achieve a return by making use of the cyclical nature of the property market by buying into investments when there is little demand and holding them to realise a return when the market turns in favour of the investors. This approach is therefore seen as less liquid, due to the need to hold the investment through the period of low demand.

This approach has very little scope for income, as there will be little to no tenancy and no duration remaining for future income. This investment seeks to make all of its return through growth, be that through redevelopment or refurbishment of an unoccupied office block or the development of a new block entirely.

Investment / return graph for Value Add property investments showing unleveraged, upside and downside outcomes" title="Investment / return graph for Value Add property investments showing unleveraged, upside and downside outcomes

To help in offsetting this higher risk, these developments are usually highly leveraged, limiting the maximum amount at risk. Investors therefore need to provide only part of the total capital, meaning that as a percentage of invested capital the returns are much higher (but likewise the percentage lost on the downside is higher).

Understanding your needs as a property investor

As with all property investments, you should understand your requirements and understand the risks of the investment approach. Professional advice should always be sought before you invest into any opportunity to ensure it is correct for you.

As you can see, whatever your personal risk appetite and approach to investment, there is a way to invest into commercial property and provide you with a potential return. This could be as as stable income or as a lump sum via high level growth to repay patience. Exactly the same as with residential property, there is an investment approach that can bring a return to fit your needs.

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Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.