BrickVest: Emmanuel Lumineau
An early stage investor of Twitter, this entrepreneur talks about solving a problem in the real estate market
Name: Emmanuel Lumineau
Company Name: BrickVest
Location: Greater London
Date Launched: 16/02/16
No. of employees: 12
Tell us what your business does:
BrickVest is an online marketplace for real estate investors opening up the real estate investment industry to new players.
Traditionally there has been a high barrier to entry to invest in offices, shopping centres and residential properties. We are making it easier for high-net-worth individuals and mid-sized institutional investors alike to build a diversified portfolio of real estate investments.
With stocks and bonds, investors can invest with no real minimum amount. Any investor with £10,000, £10m or £100m can build a diversified portfolio of various investments.
With real estate, because of the large minimum investment amount, that was impossible up until now.
While the concept is somewhat borrowed from the crowdfunding space, BrickVest does not refer to itself as a crowdfunding platform, because it offers institutional quality real estate investment opportunities, which previously were open only to large investors such as pensions funds, insurance companies and other institutions.
BrickVest is going mainly after high-net-worth individuals and institutional investors.
Through BrickVest’s platform, investors invest alongside reputable investment partners, who manage billions of real estate assets globally.
At the moment, investors can invest in a retail asset located on Oxford Street in London or an office building in central Berlin.
Where did the idea for your business come from?
The existing model for commercial property investment is broken.
My background is in investment banking and private equity as well as technology firms, Thomas has real estate investment and development experience and Adalbert is an expert in technology and start-ups.
Between the three of us we saw the great opportunity to draw on our respective experiences and offer investors, a unique opportunity to be involved in commercial property deals through an online platform which grants unprecedented market access at a fraction of typical fees.
How did you know there was a market for it?
We knew that the real estate investment market is ripe for disruption as it is an industry that has not seen any innovation for decades.
The current real estate investment market is full of unnecessary market inefficiencies and intermediaries, which comes at an expense to investors, but also real estate companies.
BrickVest will directly connect real estate companies, fund managers and developers looking to finance their real estate projects with investors looking to invest in commercial and residential real estate.
What were you doing before starting up?
I have over 15 years of experience in investment banking and private equity where my primary focus was on investing in high-growth technology firms such as Twitter, in which I was an early stage investor.
I also developed significant experience in the real estate sector later in my career. I then left the pure investment banking world to manage the $25bn Masdar City Ecocity development project in Abu Dhabi.
Have you always wanted to run your own business?
I have wanted to launch BrickVest for 15 years.
During my time working in investment banking, it occurred to me that the market is dominated by investment managers and intermediaries who control each investment opportunity and benefit from high fees.
I wanted to offer real estate investors a platform which cuts out the middle man, was easy to use and transparent at the same time.
How did you raise the money?
We are currently backed by a group of 30 different influential angel and VC investors.
Between them they bring a myriad of experience in investment, real estate and technology.
We haven’t chosen these angels purely for the sake of raising cash – our angel investors are long-term strategic partners who will help the business grow and deliver the investor returns we are aiming for.
We have also recently received backing from Rocket Internet’s Global Founders Capital and we are in the process of raising a multi-millions round of capital from existing and new strategic investors to further accelerate the development of the platform.
Investment size will start as low as EUR 1,000, enabling investors to reduce risk by building a fully diversified portfolio of real estate assets. Investors will be offered a wide range of risk-adjusted investment opportunities based on their own risk appetite and profile.
Describe your business model and how you make money:
Each investment opportunity on BrickVest’s platform is pre-vetted by BrickVest’s investment team and approved by an independent investment committee.
We believe in a 100% alignment of interest, with BrickVest investing alongside its investors and generating profits mainly from realized gains.
Investors are thereby provided access to a wide range of risk-adjusted investment opportunities allowing them to build their own diversified real estate portfolio matching their own risk appetite.
Investors will pay a low upfront, management and incentive fee, which is lower than what various gatekeepers typically charge. Unlike most investment product, investors won’t be charged when they are not invested.
What challenges have you faced and how have you overcome them?
With new FinTech companies, regulatory institutions need to be convinced that each company has a proof of concept and is compliant with financial regulations.
Although this process took several months to be completed, we made sure we embraced the compliance process and maintained an amicable relationship with the regulatory team.
Since the BrickVest platform offers an automated process and minimal risk of human error, the platform successfully passed the regulatory requirements.
What was your first big breakthrough?
We recently publicly announced the launch of our platform.
The market’s response has been fantastic. In the first two weeks of opening, we have exceeded our targets for registered users and investors.
We have also received a great response from real estate companies who want to partner with us.
They recognise that we are solving a huge problem in the real estate market and offer a “win-win” value proposition to investors and real estate companies.
What advice would you give to budding entrepreneurs?
I would advise other entrepreneurs to embrace compliance.
For so long, there has been an antagonistic relationship between regulation and financial institutions.
However, after 2008, banks can no longer avoid the importance of compliance – they must learn to be prescriptive.
Regulation is there to minimize the risks that are inherent in the financial system and FinTech presents an incredible opportunity to automate these processes and further minimize the risks of human agency. In this way, FinTech could be the best ally for compliance.
Where do you want to be in five years' time?
We will be the leading market place for real estate investments globally. Our aim is to turn real estate, which is an inherently illiquid asset class, into risk rated, liquid, frequently traded asset class.
We will achieve this by allowing investors on our platform to sell their acquired shares in the property to each other, which means that investors can exit their investments before the underlying property is sold. In other words we want to create a property stock exchange.