The vision of revitalizing Europe’s least-known tax haven is becoming ever more of a reality.
In this video, I had a quick chat with Swen Lorenz about the Sark funding. He has reached £20 million in commitments with more to come, including from various family offices.
I am investing in this distressed asset opportunity with catalysts in place.
This is NOT financial advice nor an invitation to invest.
There are many risks including the illiquid nature of the investment.
You can watch the update on:
Swen’s email: swen@sarnia-am.com
To a World of Opportunities,
The Wandering Investor.
Articles on Sark:
- Sark Island – a secret low-tax haven in Europe
- Residency in Sark – 0% income tax in Europe
- I am buying real estate in Sark, Europe’s least-known tax haven
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Transcript of “Update on Sark funding!”
LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from thewanderinginvestor.com. Today, we’ll be giving an update on the Sark fundraising. A little bit of background, Sark is a tiny island of 500 souls in the Channel Islands between France and the United Kingdom. What is unique about it is that it essentially does not really tax worldwide income at all, it only has property taxes and stamp duty taxes, so it’s a very attractive place for people to base themselves. The island is slowly falling into irrelevance, so what Swen here is doing, together with the head of state of Sark, is to launch a company to buy up 20% of the island’s real estate at distressed valuations, but then revitalize the island, the economy, and attract a number of high net worth individuals who will make the economy thrive and then make other people move to the island and make the island sustainable and livable in the long run.
I think investing in Sark is a great way to short the United Kingdom with everything that’s happening there. I think it won’t be hard to attract a number of British people to move down to Sark, especially with the latest government that was elected and their plans. Overall, real estate on Sark is cheap on relative terms, so we’re not buying expensive assets. I feel that the downside is objectively very limited at these valuations. In a world of increasing conflict and tension in the world, investing in a little tax haven between the UK and France that is a very stable jurisdiction at distress valuations is absolutely the sort of diversification that I’m looking for in my portfolio. There’s also the full backing of the Seigneur of Sark, so who’s the head of state of Sark. It’s a project that I’m personally very interested in. I actually plan on going to Sark at some point to go see everything I’m investing in myself.
Swen, can you, please, give us the update?
SWEN: Three weeks ago, we started raising money for the Series A, which is primarily purchasing assets, having a bit of working capital, being able to start refurbishing some of these properties. And in actually less than three weeks, we’re two days short of three weeks, we’ve already surpassed £20 million in funding available to us, so there’s an extraordinary level of interest and I’m delighted to say that also this includes a fair number of your followers. I love the idea of having a circle of investors, a little community of investors who are very knowledgeable about this kind of opportunity and also very passionate. Some of them are actually already going to visit in the very foreseeable future. That’s exactly what we want, we want people to actually see what they’re buying into. Fundraising is going well, there’s a bit more work to do, but I think this is going to come to a close in the foreseeable future.
LADISLAS MAURICE: Can you tell us a bit more about the type of investors?
SWEN: Right now, we have signed up exactly 53 investors. There are a lot of subscriptions for £100,000, £200,000 some for more, £400,000, £500,000, someone for a million as well. The minimum is officially £100,000 but we can also go a bit lower. Our only limitation is we’re not allowed to deal with retail investors, so we couldn’t accept the subscription for, say, £5,000, but we tried to keep this as accessible as possible. We have a number of family offices speaking to us right now. What usually happens in fundraising is that high net worth and private investors who are just looking after their own money, they can make quick decisions. Family Offices usually have several decision makers, and there’s a bit of a process, but we’re expecting that some of them will come across the finishing line in the foreseeable future as well. We are also potentially considering to lower the amount somewhat and optimize the round for the investors as far as the returns are concerned. This could also include taking on some financing.
There’s still some variables, but on the whole, I just really wanted to encourage your followers, because they’re so aligned with how we’re thinking about this opportunity, that they’re fully aware of this is not a pipe dream, this has been in preparation for three years. Fundraising is going very well, and if you want to be part of it, then look at it in the next couple of days or the next week because it’s not going to be around forever.
LADISLAS MAURICE: This is really, really exciting. Then, later on, there’ll be a Series B funding as well, right?
SWEN: Correct. Series B will essentially be geared towards purchasing additional assets. The first portfolio we want to buy as one single portfolio from a family trust is 20% of the island’s landmass. Thereafter, there are a number of properties that we’re interested in, and generally speaking, we like the idea of going up to maybe 30% or 40% of the island, not more than that. But there’s more to be purchased. We have a number of ideas for potentially also investing to network with businesses. All of that will be Part of Series B, which will come at a higher valuation. It will be very different in terms of character. It will be more suitable towards larger and potentially even small institutional investors.
Your followers, obviously, understand the difference between a ground floor opportunity and, on the other hand, investing a bit later, when there’s already been some work done on the portfolio but returns will also be lower. My recommendation really is to look at the Series A, this is where the most exciting part of the funding is taking place for those investors who are seeking to maximize their returns and to be in from the very beginning.
LADISLAS MAURICE: Look, at the end of the day, the way I’m looking at it, I’m buying tax haven real estate at distress valuations with a bunch of catalysts in place. I like it.
SWEN: Yes, and maybe just to summarize once again, the catalysts are very much refurbishing and relaunching the existing portfolio, which has a lot of issues, but with good estate management and some investment that can be sorted out, revitalizing this entire island economy, which has been struggling but which, with a bit of help, can certainly get back into shape fairly quickly, and then creating one of the world’s most unique places to live and one of the most attractive places for people from all sorts of backgrounds. That’s what we’re really passionate about. And all along the way, protecting what makes Sark special, because that always has to be at the heart and core of everything.
LADISLAS MAURICE: Fantastic. Swen, thank you very much. If anyone’s interested in getting in touch with Swen, his email is right below. All right. Thank you.
SWEN: Thanks, Ladislas.
