real estate pooled funds

By You Yang and Lin Kaiyi King & Wood’s Real Estate Group

This article continues to discuss Risk Management for China’s Real Estate Pooled Investment Funds. The first part of this article was published on Chinalawinsight on December 2011.

B. Inherent Risks of Real Estate Trust Products

Inherent risks are closely related to the characteristics of real estate trust products and thus ingrained in such products as follows:

a. Real estate pooled funds generate returns through specific assets

Real estate pooled funds generate and distribute returns by structuring the priority of beneficial interests: according to the financing agreement between trust companies and real estate developers, trust companies raise funds from the public for specific acquisition projects and guarantee investors’ beneficial interests as a priority payment. The parent companies or actual controllers (usually real estate developers) of the specific acquisition project transfer shares to the trust companies to gain secondary beneficial interests. Therefore, real estate developer’s interests are bound to the priority interests of investors and trust companies distribute returns to beneficiaries in a particular order.

Continue Reading Risk Management for China’s Real Estate Pooled Investment Funds (Part II of II)

作者:尤杨 蔺楷毅 金杜律师事物所争议解决

本文分两部分刊登, 2011年12月19日金杜法律博客(Chinalawinsight)刊登的了本文的第一部分。文章第二部分将继续对《浅论房地产集合资金信托产品的风险及控制》进行解读。

2、各类房地产信托产品的固有风险

尽管房地产信托产品种类繁多,但是各类信托产品都有其固有风险,这些风险与该类信托产品的特性紧密结合,根植于该类信托产品之中。例如:

(1) 以特定资产收益权为投资对象的信托计划

这类信托常与结构化信托相结合,典型的结构化特定资产收益权信托的模型是:信托公司与交易对手达成协议后,信托公司向公众募集资金并赋予其优先级受益权,并以募集来的资金收购项目公司的特定房地产项目的收益权。同时,项目公司的母公司或实际控制人将项目公司的股权转让与信托公司,并获得次级受益权,借此将房地产开发商的利益与优先级受益权人的利益进行绑定。在信托计划到期后,信托公司首先向优先级受益人分配信托利益,之后再向次级受益人分配剩余信托利益。

Continue Reading 信托实务专题之(三):浅论房地产集合资金信托产品的风险及控制(2)

By You Yang and Lin Kaiyi King & Wood’s Real Estate Group

A real estate pooled investment fund ("RE Pooled Fund") is where trust companies raise funds from investors (who act as both "settlors" and "beneficiaries" in the trust) and work with real estate developers to provide beneficiaries with profits in return. RE Pooled Funds generate returns through specific assets, equity investments, loans, or a hybrid thereof.

With housing purchase restrictions being implemented in China’s major cities, real estate developers working with trust companies are facing serious cash flow pressure and some of them have even experienced operating difficulties. When real estate developers are unable to provide trust companies with high investment returns on schedule, and investors continue to hold expectations of high returns regardless of investment risk, trust companies are inclined to pay investors at their own expense and solve investment return problems with real estate developers internally rather than disclose investment risk to the investors. This is partly because trust companies value their reputation and the reputation of their investment products and want to avoid upsetting trustees and commercial banks who engage in selling the trust company’s products. Trust companies may also be concerned about the potential for class-action lawsuits by investors. However, such trust companies may one day be unable or unwilling to pay investors out of their own pockets, or investors may no longer be satisfied with being paid investment returns, leading to a very unsustainable situation.

Continue Reading Risk Management for China’s Real Estate Pooled Investment Funds (Part I of II)

作者:尤杨 蔺楷毅 金杜律师事物所争议解决

房地产集合资金信托产品是指信托公司从多个委托人(也是“投资人”,相对于单一信托而言)处募集资金,用于与房地产公司合作开发房地产项目,获得收益后支付给委托人作为投资回报的信托计划,常见形式有特定资产收益型、股权投资型、贷款型以及复合型等。

伴随近期全国各主要城市商品房限购政策的出台和执行,不少处于信托计划中的房地产开发商面临着非常严峻的现金流压力,部分公司已经陷入经营困境。当这类房地产开发商没有能力向信托公司按期支付高额投资回报时,投资人却不愿面对投资风险,执着的向信托公司讨要预期回报,信托公司虽然有苦难言,却又不愿公开披露风险,惟恐得罪投资人和代理销售信托产品的商业银行,更不愿酿成集体诉讼,断了将来继续发行信托产品的信誉和财路,只能自己掏腰包堵上投资人的窟窿,再内部消化与房地产开发商的那些理不清的纠葛。试想一下,如果有一天信托公司再也没有能力或者不想堵投资人的窟窿,又或者投资人的风险意识、维权意识觉醒,不再满足于被敷衍的支付投资回报,转而追究事实真相和责任,事态将会如何发展?这样的平静还能继续维持吗?

Continue Reading 信托实务专题之(三):浅论房地产集合资金信托产品的风险及控制(1)