Risk warningThe non-binding translation below is for your convenience only. The original legal version (in German) can be found here: http://www.kensington-crowd.com/fuer-anleger/risikohinweise.
1. General notesThe following general risk notes describe in general terms the risks that may arise from investing in subordinated loans brokered through the kensington-crowd.com platform. These general risk phrases are supplemented by project-specific risk phrases in the individual financing projects. These project-specific risk phrases may differ from the explanations below and take precedence over them. The project-specific risk information is made available to investors as part of the respective investment.
2. General risks and risks arising from the structure of subordinated loans
- Maximum risk - total loss risk
- Subordinated risk and entrepreneurial nature of the investment
The lender therefore bears a (co-)entrepreneurial risk that is higher than the risk of a regular lender. The lender does not himself become a shareholder of the borrower and does not acquire any share- holder rights. It is not a so-called gilt-edged participation, but an entrepreneurial participation with a liability function similar to equity capital.
The qualified subordination could have the following effects: The borrower would have to suspend the payment of interest and repayment of principal for as long as he is obliged to do so in the event of insolvency. The lender would not be allowed to claim his claims when they mature. The lender would have to repay an interest payment to the borrower on demand, which he had unduly received despite subordination. It is also possible that the lender may not receive the interest payments or the principal payments as a result of subordination. In addition, the lender may have to pay tax on interest already paid, even though he is obliged to repay the amounts received.
- Lack of collateralisation of loans
- Final maturity of redemption
- Sellability (fungibility), availability of invested capital, long-term commitment
- Possible extension of capital commitment
3. risks at borrower level
- Business risk of the borrower
- Default risk of the borrower (issuer risk)
- Project company
- Early business phase
- Risks arising from business activities
On the other hand, the general business activities of the respective borrower may also be associated with risks, such as market-related risks (e.g. decline in demand and sales; payment difficulties or insolvencies of customers; cost increases and capacity bottlenecks on the procurement side; political changes; interest rate and inflation developments; country and exchange rate risks; changes in the legal and tax framework of the borrower‘s activities) and company related risks (e.g. risks from the financial and economic crisis, B. quality risks; product defects; financing and interest rate risks; risks arising from trademarks and industrial property rights; dependence on partner companies, key persons and qualified personnel; risks arising from legal disputes, inadequate insurance cover, from the shareholder and/or group structure, from the internal organization, from asset valuations and additional tax claims).
These and/or other risks could have a negative im- pact on the borrower‘s net assets, financial position and results of operations. As a result, the borrower may not have the necessary funds available in the future to meet the interest claims and repay the loan capital employed.
- Capital structure risk
- Forecast risk
Past market or business developments are no basis or indicator for future developments.
4. Risks at investor level
- Borrowing risk
- Note on risk diversification and avoidance of risk concentration
5. Instructions of the platform operator
- Scope of the project appraisal by the platform operator
- Activity profile of the platform operator
- Information content of the project description