Dubai: Small-ticket funding opportunities strictly with a short-term investment horizon are doing the rounds in the region for investors. Such a trend is in keeping with the times with high networth investors looking for a quick entry and exit given the economic uncertainties.
Industry RE Ltd was marketing a $3 million Gibraltar-registered fund that would be used on renewable energy projects by Space Energy Inc, which intends to harness space-based solar power.
The minimum investment was set at $100,000 with the fund open between March 28 and April 8 and the deadline could be extended to meet the target.
To get potential investors to give it serious consideration, the fund promoters are sweetening the offer with a 12.6 per cent profit rate for the 12-month period.
"The investment is to secure a power purchase agreement [PPA] for a renewable energy project that will receive an immediate $3.6 million cash infusion from its construction partner on the PPA completion," said Jed Nancarrow, general manager at Industry RE Ltd.
"This is one of three avenues that support the investment repayment."
The fund will invest into Space Energy AG to cover its operating needs, while contracts are finalised for Space Energy Terrestrial to build, own and operate four solar energy parks and facilities of 20MW each on Navajo land in the US.
On how the investor return can be guaranteed, Nancarrow said: "The fund is securitised by a holding of $27 million company shares which can be sold on a secondary market to recoup the invested capital if repayment of the $3 million is not transacted in 12 months."
The $3 million fund has been set up as a "protected cell company" and comes with a clearly defined investment guideline. In this case, the project will only allow the $3 million to be invested as a bridging loan to the company.
According to the offer document, venture capital funds' exposure to renewable energy was estimated at around $8.4 billion.
