Fractional model applies beyond property

21-Aug-2015

By Elizabeth Somerville

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Investors will benefit from industry adoption of fractional investment models across a range of asset classes, fractional property investment firm DomaCom has said.

A fractional investment model, which facilitated investment in an asset by dividing it into small parcels, would allow investors to break into markets they might not have been able to afford or access, DomaCom general manager, sales and marketing Warren Gibson told financialobserver.

“The fractional model lends itself to other asset classes, like private equities, bonds, and debt,” Gibson said.

At present, DomaCom’s fractional property investment fund used such a model to allow investments from those investors with smaller balances, or those who did not want to or could not afford to carry the loan of a whole property, Gibson said.

“It’s a different way of looking at property investing,” he said.

“Most people understand property as an ‘all or nothing’ proposition.

“The DomaCom fund is the first [investment vehicle] that is giving people the opportunity to buy a bit of a property.”

The fund was on 30 approved product lists, including with seven dealer groups with a combined total of 800 advisers, Gibson said.

“[We’re in discussions with] 24 other dealer groups who are sitting in the wings, seeing how it goes before they join in,” he added.

Gibson said fractional property investment also provided an alternative to negative gearing for those investors who wanted property in their portfolios.

“Negative gearing in any asset class should cease, or at the very least be severely restricted, so as to not put an impost on government funds, our taxes, and to enable money to go where it is needed most,” he said.

“By all means let investors have free rein where they choose to put their money, but let’s not fund it for the few to the detriment of the many.”

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