Introducing Real Estate: Broadening access to alternative investments

Posted by Mark Skapinker on Dec 18, 2020

Brightspark has been active in the Canadian VC industry for over 20 years. Six years ago, we adapted our model to enable non-institutional investors to participate in our deals. This opened up the market to enable access to this alternative asset class by any accredited Canadian investor. Our investors have told us that they are interested in other alternative asset investments, and specifically indicated an interest in alternative Real Estate opportunities.

Brightspark Financial (the EMD “fintech” arm of Brightspark) is pleased to offer the Konfidis Single Family Residential (SFR) Homes Portfolio Fund, which provides non-institutional investors access to Real Estate - specifically the coveted SFR asset class.

Accredited investors can learn more on the Brightspark investor platform.

Why Single Family Rental (SFR) Real Estate?

An interesting complement to Venture Capital

So, why is Brightspark Financial offering access to a Real Estate product?

We always stress the need to diversify – if you are going to invest in a risky asset such as tech startups, it’s strongly encouraged to spread your investment amongst multiple companies. In addition, we also encourage diversification into other uncorrelated asset classes, and know that many of our investors already invest in the public markets, various financial structures, and of course alternatives such as Real Estate.

Why do investors choose Real Estate funds?

  • Passive income: Earn income without active management

  • Capital appreciation: Historically, real estate prices have increased over time

  • Defensive asset: Homes are usually stable investments with steadier returns

  • Diversification: Low correlation to other asset classes

We have all witnessed the consistent and steady growth of residential real estate investment in Canada. Be it in the value of our own homes, or investment properties, real estate remains a consistent growth opportunity – not the same massive upside of tech, but safe and consistently solid growth. In Canada, while condos have slid during COVID, the private single family housing market continues to create solid growth.

Like VC, investing in private Real Estate can sometimes have a higher barrier to entry for individuals. Building a portfolio of homes can be expensive, heavy on mortgage/liabilities, time-consuming and expensive to manage, and most importantly difficult to access – especially at scale – without connections or technology. This fund aims to break down all those barriers and make it easy for accredited investors to access the asset class.

And while this opportunity is a new type of alternative investment to our normal investments, it is closely tied to our VC roots with a leading technology-enabled and data science-focused strategy. Leveraging their proprietary tech stack and vast data analysis, our partners are providing quality access to this sought-after asset class with a scalable model.

Professionally managed

The people behind the fund

We are only willing to offer external products from partners we know and trust, and that are absolute experts in their field.

When our friends at Firepower Capital started talking to us about creating a fund to invest in single family residential properties, we realized that this is quite similar to our SPV model. Any accredited investor who wants to diversify specifically in the housing market can invest in this fund – the fund and asset managers will worry about all the practicalities such as securing mortgage-type financing, renovations, repairs, renting, taxes and utility bills and selling.

The idea is that Brightspark contributes its expertise in fund organization and management, Firepower contributes its financial management expertise, and Konfidis (a subsidiary of Firepower) contributes its experience, track record of real estate purchasing and property management, along with its proprietary tech platform.

Konfidis Inc. is a leading property technology and real estate service firm focused on enabling investor access to the sought after Canadian Single-Family Rental (SFR) asset class. Konfidis’ technology platform has been developed and refined over a decade and supported by millions of dollars of investment. Konfidis is proud to trailblaze investor access to SFR and support alternative and professionally managed housing solutions for Canadian families. Konfidis benefits from the active support and utilization of infrastructure and expertise of its strategic partner, FirePower Capital.

Konfidis’s technology provides for efficient evaluation of the 40,000+ active MLS listings – analyzing 100+ million data points in real-time to provide reliable financial projections. Combined with a human layer of local real estate professionals, this system enables the fund to pick cities, neighbourhoods and properties at scale, and in a manner that aims to deliver long-term outsize risk-adjusted returns.

If you’re interested

We are actively fundraising for this fund. If you are an accredited investor looking for a unique model to access a portfolio of SFR homes in Ontario, you can create a free account to review the offering documents.

You can also contact our team if you would like to receive more information.

Risk notice: Investments in real estate are speculative and involve a high degree of risk. Investments should not be made by any person who cannot afford the loss of the entire investment. The real estate benefits above are not guaranteed and do not necessarily apply to every real estate investment.

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