Who can invest with AssetFractio?
Any Resident Individual/Non-Individual & Any Non-Resident Individual/Non-Individual
How can NRI’s invest with AssetFractio?
NRI investors can invest through a NRE/GIFT City Bank Account in India or any Overseas bank account. Your returns and sale proceeds, however, will be credited to your NRO account.
What is the minimum investment?
The Token unit value is USD 100. The minimum initial investment is USD 1000. Please note that this is subject to change.
Do you offer any guaranteed returns?
No, AssetFractio does not guarantee any returns. The return on Token investment results from income distribution (linked to income generated from underlying asset) and price appreciation. Price appreciation comes from either trading of Tokens OR Asset Sale. However, please note that the investment in token may result in capital loss as its value is determined by market forces of demand and supply and fundamentals of the underlying asset.
How are your investments safe?
Your investments are absolutely secure regardless of what happens to AssetFractio.
Your investment is in the form of Tokens that represent the securities i.e. units/equity shares/compulsorily convertible debentures of a Special Purpose Vehicle (SPV) i.e. Trust/LLP/Private/Public Limited Company, incorporated solely for the purpose of acquiring and owning the asset. By virtue of holding Tokens that represent the securities in the SPV, you in turn own the asset.
The SPV is bound to comply with statutory and corporate governance requirements such as holding general meetings, filing returns, etc., that are undertaken by AssetFractio and are conducted under the oversight by Regulators and Trustees. With this, the ultimate decision-making power lies with the investors for all major governance decisions specific to SPV.
Thus, even if AssetFractio is not functional, your ownership and control of the asset remain secure.
How are the investments structured?
For each asset listed on the AssetFractio Platform, a Special Purpose Vehicle (SPV) is created in which funds are raised to purchase, own and manage the property. Your investment shall be towards subscription of Tokens that represent the securities of i.e. units/shares/compulsorily convertible debentures (CCDs) of the SPV that holds the property and represents your fractional investment.
AssetFractio shall provide asset management services to the SPV and undertake accounting, secretarial, reporting, leasing, maintenance, and other operational aspects under the asset management services contract with the SPV.
What is a SPV?
A Special Purpose Vehicle is an entity incorporated/created under the law, being a Trust, Limited Liability Partnership (LLP), a Private Limited Company, OR a Public Limited Company etc., for a specific lawful purpose. Any Asset listed on the AssetFractio platform will be owned by an SPV being a Trust/LLP/private/public limited company set up for this specific purpose.
When & how will I receive Investment returns?
The return on your investment is in the form of dividend/Interest paid on Tokens and payment frequency is expected to be Quarterly/Monthly and subject to receipt of income from underlying asset. In addition, you can generate capital appreciation through trading of Tokens on the AssetFractio Platform. Capital Appreciation is dependent on various factors like demand and supply dynamics of Tokens and fundamentals of underlying asset.
How will I be updated on the performance of my investments?
You can view the performance of your investment through your online dashboard.
Can I transfer my investment amount in any foreign currency?
The base currency of fund raising through SPV is USD. Thus, the transfer of investment amount by NRIs in any other foreign currency shall be converted into USD.
How does the investment process work in detail?
The first thing you will need is a ID/Account which KYC/KYB verified, that can be used to sign into AssetFractio. The documents you will require for KYC/KYB are -
- Copies of PAN Card and Aadhaar Card.
- Non-Resident investors need to provide Passport/Driving License/Utility Bill besides PAN Card /Aadhar Card
- Non-Individual entities will be required to submit additional documents like CIN, GST etc.
- Bank Account Number is mandatory whether Resident/Non-Resident Individual OR Non-Individual.
Once verified, you are ready to transact on the platform through purchase and sale of tokens listed on the platform either through Initial Token Offering (ITO) OR secondary market.
Investment Process primarily constitutes an issuance of Tokens/securities through ITO and further sale & purchase of the Tokens through secondary market on platform.
Step 1: SCREENING of Real Assets
Step 2: IDENTIFICATION of Asset through DUE DILIGENCE
Step 3: ASSESSEMENT of Investors’ Interest
To transact in ITO, all you need to do is click on the ‘I’m interested’ button and confirm your investment details. You will receive access to all necessary documents related to property and ITO for your perusal and scrutiny.
If you decide to subscribe to ITO, you will need to e-sign a binding Contribution Agreement & Expression of Interest (EOI) and transfer the initial 10% advance to Escrow Account through Payment Gateway, which you will find on your dashboard.
Step 4: OBTAIN FULL COMMITMENT from Investors
Once 100% commitment is received from interested investors, the primary offering opportunity is considered to be fully funded. You will then be required to transfer the remaining amount into your virtual account under Escrow Account.
Step 5: CREATION OF SPV
Your investment amount will then be routed from Escrow Account to the to the bank account of the SPV. The SPV will then proceed to purchase the asset
Step 6: TRANSFER Asset to SPV
Step 7: INITIAL ISSUANCE of Tokens that represent the partial ownership of SPV
You will be allotted corresponding Tokens representing the above into your own wallet accounts respectively.
Now Tokens are essentially representing your fractional ownership of the underlying asset of SPV.
Step 8: DISTRIBUTE Proportionate Income generated from Asset
Any income generated by the underlying asset shall be proportionally distributed to the investor regularly after deducting any expenses such as Property management Fees and SPV maintenance expenses etc.
Step 9: EARN Capital Appreciation through Sale & Purchase of Tokens on the Platform OR Asset Sale
Step 10: TRACK Portfolio of Tokens
What happens if a property does not get fully funded in ITO?
In an unlikely event that a property on our platform doesn't complete its funding target, any funds that have been committed by investors will be reimbursed to the verified bank account with/without interest.
What is the timeline of the ITO?
AssetFractio generally shall have a time frame of 90 days to ensure that the property receives complete funding, registration of property under SPV and allotment of corresponding shares/CCDs (i.e. Tokens) into the respective investor’ accounts. However, we look to reduce this time period as the platform continues to grow and mature.
Do I have to visit location of the property before investment?
No, there is no need to visit the property in person. We do the due diligence and share all the relevant documents for your review to enable your investment decision.
Do I have to visit your office to invest?
No, All documentation will be signed through a reputed digital signature provider like DocuSign / AdobeSign / ZohoSign
What if I want to withdraw my initial advance?
Once an initial investment or advance is paid, a termination fee shall apply for any withdrawals. The fee will be as per the terms mentioned in the Expression of Interest.
Is there any lock-in on my investment?
No, there is not any lock-in from the time the property is registered with SPV and Tokens are issued and allotted. However, we encourage the investors to invest from a medium to long term perspective to get full benefits of capital appreciation of the property.
How can I exit my investment?
You can exit your investment any time but preferably we would like the investors to hold the Tokens for a reasonable time period to get the full benefits from the asset.
The exit of investment can be done in following ways.
- Token Sale in Secondary Market:
You can exit the Tokens through OFFER FOR SALE/AUCTION on AssetFractio Platform.
- Asset Sale by SPV:
If a lucrative opportunity for selling the asset is available to SPV, AssetFractio as the asset manager shall take the necessary steps to evaluate the opportunity. After evaluation, AssetFractio will present it to the Tokens’ investors through the platform to decide if the asset is to be liquidated or held.
If at least 75% of the token holders(by value) vote to sell, we will begin the process of liquidation. All related reports and documents to assist the investors in making their decision shall be provided by AssetFractio.
Once the asset is sold, the gains (post any taxes and fees) shall be distributed amongst securities’ holders and remitted to the respective registered bank accounts.
If token holders vote to hold, the investment will continue as is, until the next poll where the process will be repeated.
Will there be a management fee when the property is not tenanted?
No, there will be no management fee charged to investors for as long as the property is not tenanted.
Who manages the asset?
AssetFractio as an Asset Manager will take care of all aspects related to the asset.
Should I engage an attorney or lawyer?
AssetFractio undertakes the legal due diligence of the property before it is purchased by the SPV. All investment and property-related legal processes are handled by AssetFractio.
However, you are welcome to seek tax and legal advice from your advisors to understand if the opportunity listed is suited for you. Should you engage any legal/tax advisor, we will be happy to answer any questions that they may have.
What kind of documentation will I need to review and/or sign?
To begin with, you can go through various documents like Private Placement Memorandum (PPM) for issuance of tokens, Contribution Agreement & Expression of Interest, and Investment Memo etc. Then you can sign the Contribution Agreement & Expression of Interest to confirm your commitment and remit 10% of your investment amount.
Following this, a Drawdown Notice will be sent to you once the opportunity has 100% commitment from all interested investors post which you may remit the remaining funds towards your investment.
The SPV executes the Trust Deed with Trustees, Investment Management Agreement with AssetFractio.
All these documents shall be executed through an e-signing process complete with an audit trail and no physical copies will have to be signed. This makes your investment process completely digital, fast, transparent, and very convenient.
How does AssetFractio ensure that property titles are clear?
AssetFractio has an experienced team that performs thorough financial, technical and legal due diligence before listing any property on our platform. We engage reputed Tier-I law firms to conduct due diligence on the property title.
Are investors allowed to see the property related documents and ITO related documents?
Yes, you can view all the asset-related documents including the Lease/Rental/Tenancy Agreement/ Deed or Leave & License Agreement uploaded on the investor’s respective dashboards.