150302_Cadence_Colonial_2.

pdf

18/04/2015

08:39

COLONIAL
CAPITAL

Good Investments : Great Returns

CM

MY

CY

CMY

London . Chicago

CM

MY

CY

CMY

18/04/2015

08:39

Secured
contract
Asset
backed
Fixed terms

Three
Years

No Maintainenance

150302_Cadence_Colonial_2.pdf

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

The Background
How It Works
Investment Strategy
Strong Rental Cashflow
Housing Choice Voucher Program
Why Invest in Chicago
About Us & Our Partners
First Returns

Page 1
Page 1
Page 3
Page 5
Page 7
Page 9
Page 11
Page 13

CM

MY

CY

CMY

COLONIAL
CAPITAL

Good Investments : Great Returns

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

The: Bond

How: It works

The Colonial Capital Group PLC Three Year U.S. Social

Housing Bond (SHB) was first issued in February 2014
with the express objective of re-housing thousands of
families in the Chicago area and to create an exceptional
investment vehicle for investors to make their money work
harder.

Our experienced team of property negotiators acquire

properties on behalf of Colonial Capital Group PLCs
Social Housing Bond, direct from U.S. Banks and U.S.
Government-sponsored entities (Organisations such as
Fannie Mae and Freddie Mac.) via Foreclosure sales.
These are typically two - four unit multi-dwelling houses in
Chicago.

There is no mistaking that the U.S. housing market has

been on a downward path since it reached an all-time high
in late 2006 early 2007. However, after plummeting over
50% in some areas, the consensus is we may have finally
found a bottom to the market.
C

CM

MY

CY

CMY

The graph below (Figure 1) shows that the bulk of the drop
in prices occurred between mid-2006 and early 2009. This
has provided an ideal opportunity for investors wishing to
put their savings to good use in this ethical environment.
The Three Year Fixed Social Housing Bond means that
you can now invest in property without the hassle of
managing your own portfolio. And, with as little at
10,000 you will receive a 12% return on your money.

After a complete refurbishment we lease these properties

to U.S. families under the Housing Choice Voucher
(HCV) Programme, formerly known as Section 8. This
allows Colonial Capital Group PLC to achieve high rental
yields that are paid and underwritten by the U.S.
Government. The properties are then managed and
maintained by a professional property management
company. In some cases we may sell a portion of our
portfolio to help accelerate growth and use leverage where
appropriate.
There is a minimum initial investment of 10,000 and
subsequent purchases can be made at 1,000. The returns
are as follows:

3 Year SHB 12% p.a. 100% end of term redemption

The first interest payment date is six months after the final
date of subscription, with interest calculated on a daily
basis from the date of investment.

Figure 1
100

U.S. National Prices Historical

95
90

80

70
65

12%
10%
8%
6%
4%

55
50

2%

Year
06

07

08

09

10

11

12

13

14

0%

Delinquent

Loans

60

% Of Active

75

Total Delinquent and Foreclosure % By Month

Relative Index Value

85

95

Foreclosure
96

97

98

Year
99

01

02

03

04

05

06

07

09

10

11

12

13

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

Chicago, Illinios

CM

MY

CY

CMY

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

Investment: Strategy
We focus on multi-unit dwellings which consist of between
two - four apartments and all properties are purchased
direct from U.S. banks or via foreclosure sales and are
refurbished to a high standard, which includes new
kitchens, bathrooms, windows and wooden floors.
The yields achieved deliver the interest payment to the
Bond investors while allowing Colonial Capital Group
PLC to acquire more properties.

CM

Throughout the fixed three year term, each property is

professionally managed to maximise the returns and
protect the investment. This includes a mixed strategy of
buy & hold, buy & sell at the most appropriate times.
The table below shows the Housing & Urban
Development (HUD) Departments agreed rent payable in
Chicago for 2015.

MY

One-Bedroom
$922
Three-Bedroom
$1,395

CY

CMY

Two-Bedroom
$1,093
Four-Bedroom
$1,624

Our strategy is to undertake more property dealing in the

early part of the Bonds lifecycle while prices are
particularly low. This will help to accelerate returns before
switching to a longer term holding strategy as the bond
matures
Colonial Capital Group PLC can acquire a two unit
property for as little as $30,000 and refurb it for
approximately $50,000. A two unit property with two,
three bedroom apartments will produce a rental income of
$33,480 per annum. If we take an acquisition and
refurbishment cost of $80,000 we will achieve an
un-leveraged yield of 41.85%.
3

Another option is to acquire, refurbish and sell. The above

example could be sold for $186,000 and still produce an
un-leveraged yield of 18% per annum for a buy-to-let
investor (the cap rate).
The figures achieved are even better on a three unit
dwelling. In this example the property has three, three
bedroom apartments. A typical acquisition and refurb cost
would be approximately $100,000.
The rental income generated by this property would be
$50,220. This would provide an un-leveraged yield of
50.2% or an un-leveraged profit of $100,880 if we sold at
a cap rate of 25%. The sale of just one of these three
bedroomed apartment properties generates enough cash
to cover all the Bond interest payments and the final
redemption payment.

Three, three bedroom

apartments
(based on an investment of $100,000.
Rental Income as per FMR
Redemption Payment @ 100%
Sale Proceeds
Total Repaid to Bondholder
Note Investment
Note Interest @ 12% per annum
Property Type:
Total Note Interest Payable
Cap Rate

$50,220
$100,000
$200,880
$136,000
$100,000
$12,000
3 Apts - 9 Beds
$36,000
25%

All of the returns shown above are un-leveraged.

The Fair Market Rent (FMR) is set by the Housing & Urban Development department and is paid direct to either the investor
or the investors agent, thus guaranteeing a certain level of rental income.
All funds invested are secured against the property portfolio of Colonial Capital Group PLC
* The HUD is a U.S Governmental Department

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

CM

MY

CY

CMY

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

Strong Rental: Cashflow

As more people are forced to rent their home in Chicago,
the demand for rental property increases and this creates
upward pressure on rental prices.
1 People who have suffered from a foreclosure still need
somewhere to live and therefore their only option is to
rent.
2 Many first time buyers cannot get a mortgage to buy a
property so they are forced to rent instead.

70

68

66

64

62

325

3 Voluntary Default, whereby a regular borrower hands

back their keys because they are in a negative equity
position and they decide they would be better off
renting.

CM

There has been a steady and unavoidable rise in the price

of rental income across the U.S. since 1983.

MY

Home Ownership Rates: United States

Year
75

70

80

85

90

95

00

05

10

House Prices: United States

300
275
250
225
200
$k 175
150
125

CY

Inflation-Adjusted House Prices

CMY

Nominal House Prices

100
75
50

Inflation-Adjusted Pre-Bubble Trend

25

Nominal Pre-Bubble Trend

Year
70

74

78

82

86

90

94

98

02

06

10

14

150302_Cadence_Colonial_2.pdf

18/04/2015

08:39

Michigan Avenue

CM

MY

CY

CMY

150302_Cadence_Colonial_2.pdf

10

18/04/2015

08:40

The: Housing Choice

Voucher Programme
The Housing Choice Voucher program is the U.S.
Federal Governments major program for assisting very
low and low-income families, the elderly and the disabled
to afford decent, safe and sanitary housing in the private
market. Since housing assistance is provided on behalf of
the family or individual, participants are able to find their
own housing, including single-family homes, townhouses
and apartments.
The participant is free to choose any housing that meets
the requirements of the program and is not limited to units
located in subsidised housing projects.
C

CM

MY

Housing Choice Vouchers are administered locally by

public housing agencies (PHAs). The PHAs receive
Federal funds from the U.S. Department of Housing and
Urban Development (HUD) to administer the voucher
program.

CY

CMY

A family that is issued a housing voucher is responsible for

finding a suitable housing unit of the familys choice where
the owner agrees to rent under the program. Rental units
must meet minimum standards of health and safety, as
determined by the PHA.

A housing subsidy is paid to the landlord directly by the

PHA on behalf of the participating family. The family then
pays the difference between the actual rent charged by the
landlord and the amount subsidised by the program.
Under certain circumstances if authorised by the PHA, a
family may use its voucher to purchase a modest home.

Home ownership level has

fallen by approximately six
million since 2007
The Rent Subsidy
The PHA calculates the maximum amount of housing
assistance allowable. The maximum housing assistance is
generally the lesser of the payment standard minus 30% of
the familys monthly adjusted income or the gross rent for
the unit minus 30% of monthly adjusted income.
All rental payments are paid direct from the U.S.
Government department HUD into our managing agents
bank account before being passed directly to Colonial
Capital Group PLC.

150302_Cadence_Colonial_2.pdf

11

18/04/2015

08:40

Navy Pier

CM

MY

CY

CMY

150302_Cadence_Colonial_2.pdf

12

18/04/2015

08:40

Why: Invest in Chicago?

Diverse Economy

Growing Economy

Chicago is home to more than 400 major corporate

headquarters, including 27 Fortune 500 Headquarters.
Rated #1 Large U.S. Metro for Economic Diversity by
Moodys Investor Services. Chicago is a key player in
every economic sector from risk management innovation
to manufacturing to information technology to health
services.

Chicago continues to grow: total trade surpassed $160

billion in 2010 (up from $95 billion in 2004). Chicago is
top-ranked for economic potential among major cities
across the world and in 2010, World Business Chicago
identified more than 230 medium-sized new and
expanding facilities announced, under development or
completed in the metro area, representing a total of more
than 14 million square feet and nearly $2 billion in
economic development activity. In August 2010, Inc.
Magazine included 202 companies from the Chicago
region in its annual list of the 5,000 fastest-growing
companies in the U.S. placing Chicago 4th among metro
regions for number of Inc. 5000 companies; the city itself
ranked second with 101 companies .

Trading Post

CM

MY

CY

The most distinctive aspect of Chicagos financial services

community is also among its oldest. The citys derivatives
exchange community, which started with commodity
futures trading at the Chicago Board of Trade in 1848,
established the city as a global financial center. To this
day, even though the trading of derivatives is conducted
on an ever-expanding international scale, Chicago
arguably remains the geographic center of global
derivatives trading in terms of markets, scale and talent.

CMY

Chicago continues to grow

Chicago has over $3 billion in global derivatives trading
volume, nearly two times the trading volume of New York.
Chicago futures and options exchanges collectively
dominate exchange-based derivatives trading, with over
four billion contracts traded in 2013.
Chicago futures and options exchanges collectively
dominate exchange-based derivatives trading, with 51% of
exchange based derivatives trading in the U.S.
Since 2000, the volume of global derivatives trading has
increased from a little over two billion contracts traded to
more than four billion per year in 2013.
9

150302_Cadence_Colonial_2.pdf

13

18/04/2015

08:40

Chicago, Illinois

CM

MY

CY

CMY

10

150302_Cadence_Colonial_2.pdf

14

18/04/2015

08:40

About us: Our Partners

Why: Invest Now?

Colonial Capital Group PLC has offices in London, U.K. and

Chicago, Illinois. Its sales and administration HQ are in
Chelmsford, Essex, U.K.

To take advantage of the exceptional returns without

the hassle of direct ownership.

No worries about maintenance or refurbishment issues

compared to direct ownership.

No rental vacancy periods compared to direct ownership.

Fixed contractual interest either paid or compounded every

six months.

Short to medium term. Returns and Redemption payments

are concluded after Three Years.

Asset backed investment.

All bondholders have a floating First Ranking Charge

against the Property Portfolio of Colonial Capital Group
PLC.

85% rule. The amount of Bonds in circulation cannot

exceed 85% of the value of the property portfolio.

Fixed return of 12% per annum for the Three Year SHB
term.

Property management, trading and development team in

place with combined experience of over 40 Years.

Low entry levels of 10,000.

The Social Housing Bond was established to take advantage of

the dislocation in the U.S housing market and to provide both
private and institutional investors from across the globe with
above average asset backed returns.
Colonial Capital Group PLCs management team has more
than 40 Years combined property experience in the
Chicagoland area.
USA
Chicago Housing Authority
Chicago, USA

Lawyers
McCarthy Duffy LLP
and Squire Patton Boggs (U.S) LLP

CM

Accountants
McGladery, Chicago, USA

MY

CY

Bank
BMO Harris Bank, Signature Bank

CMY

UK
Product Advice
Clive Wolman, Barrister at Law, Lincolns Inn Fields, London
Accountant
Baker Tilly,
Chelmsford, Essex
Solicitors
Grant Dawe LLP, London
FCA Custodian and FX Partner
GCEN

11

150302_Cadence_Colonial_2.pdf

15

18/04/2015

08:40

Soldier Field

CM

MY

CY

CMY

12

150302_Cadence_Colonial_2.pdf

16

18/04/2015

08:40

First Returns: After Six

Months
Buying Process - You will find everything you need to
apply in this pack.
Just complete and sign the Bond Application form
Enclose the relevant Anti-Money Laundering
documents, copies must be certified (two forms of ID,
one showing your current address which must also be
dated within the past three months and one which
must be a picture ID such as a current Passport or
Driving License)
C

CM

MY

CY

CMY

Funds request will be sent with the payment details

once anti-money laundering checks are complete
Bond Certificate issued
First returns received six months from the end of the
subscription date, unless the compound bond is
selected, in which case the annual interest payment is
compounded each year and paid in full upon
redemption

13

150302_Cadence_Colonial_2.pdf

17

18/04/2015

08:40

CM

MY

CY

CMY

14

150302_Cadence_Colonial_2.pdf

CM

MY

CY

CMY

15

18

18/04/2015

08:40

150302_Cadence_Colonial_2.pdf

19

18/04/2015

08:40

CM

MY

CY

CMY

COLONIAL/mb/032015- v.01

150302_Cadence_Colonial_2.pdf

20

18/04/2015

08:40

COLONIAL
CAPITAL

Good Investments : Great Returns

This document has been prepared by Colonial Capital Group PLC (Company) and
approved by Blackstar Wealth Management Limited for distribution only to persons
authorised to receive the Companys Information Memorandum dated 10 March
2015 (IM).This document has been prepared solely on the basis of summarising the
investment opportunity set out in the IM and should be read in conjunction with the
IM and, specifically, the risk warnings contained therein. Any decision to invest in the
Company should be made solely on the basis of the information contained in the IM.
Distribution of the IM will be in accordance with the relevant provisions of the
Financial Services and Markets Act 2000. This document should not be reproduced or
redistributed without the consent of the Company.
C

Blackstar Wealth Management Limited is authorised and regulated by the FCA and
is entered on the FCAs Register with registration number 491609 and can be
contacted at 17 Wrens Court, Lower Queen Street, Sutton Coldfield, West Midlands
B72 1RT.

CM

MY

CY

CMY

Colonial Capital Group PLC

288 Bishopsgate, London EC2M 4QP
Tel: +44 (0) 20 33 55 7775
www.ccgplc.com
info@ccgplc.com

An offering for interests in Colonial Capital Group PLC is made only

pursuant to a Confidential Private Placement Offering Statement.