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Camden Development Finance
Equity Partners & Joint Ventures

Development Equity in Camden

Access equity partners and joint venture funding for your Camden development projects. Fund up to 100% of project costs through profit share structures, preserving your capital for growth and scale.

100%
Project Costs Funded
20-50%
Typical Profit Share
£300M+
Total Funded

What Is Development Equity?

Development equity is a form of investment funding where an external investor provides the equity capital required for a property development project in exchange for a share of the profit. Unlike debt finance, which charges interest regardless of the project's outcome, equity investors participate directly in the risk and reward of the development. Their return is generated when the completed units are sold or the project is refinanced — if the project performs well, the investor earns a proportionate share of the profit; if it underperforms, they share in the reduced returns or losses alongside the developer.

For Camden developers, equity funding opens the door to projects that might otherwise be impossible to pursue. The borough's strong property values mean that even relatively modest schemes require significant capital. A six-unit conversion in Kentish Town might have total costs of £2 million, requiring £600,000 of equity with senior debt alone. Not every capable developer has that level of capital readily available, particularly those looking to grow their business and run multiple projects. Equity partners solve this constraint by contributing the capital in exchange for a share of what is typically a healthy profit margin in Camden's strong residential market.

Our role in equity arrangements is threefold: we identify and introduce suitable equity partners from our investor network, we structure the deal to balance the interests of both developer and investor, and we coordinate the equity placement with the senior debt facility to create a cohesive capital structure. Our experience with Camden development projects means we understand what investors are looking for and how to present opportunities in a way that builds confidence and leads to successful partnerships.

Equity vs Debt: Understanding the Difference

The choice between equity and debt funding has fundamental implications for your project's risk profile, cost structure, and profit distribution. Understanding these differences is essential for making the right decision.

Equity Funding

Profit share investment

No Monthly Interest

No interest charges during the build — the investor's return comes entirely from profit share at completion

Risk Sharing

The investor shares in both the upside and downside, reducing the developer's personal financial risk

Up to 100% Funding

Combined with senior debt, can cover the entire project cost — zero cash from the developer

Profit Share Required

You give up 20-50% of net profit — potentially a significant amount on successful Camden projects

Debt Funding

Interest-bearing loans

Fixed Cost of Capital

Interest rates are agreed upfront — the cost is predictable regardless of project performance

You Keep All Profit

After interest and fees, all remaining profit belongs to the developer — no profit share required

Full Operational Control

No investor oversight of project decisions — you retain complete autonomy over the development

Interest Regardless of Outcome

Interest accrues whether the project is profitable or not — all downside risk sits with the developer

The Real-World Impact

Consider a Camden development generating £400,000 of net profit. With debt-only funding, you keep the full £400,000 but have paid approximately £80,000 in interest and contributed £300,000 of your own equity. With equity funding, you might share £120,000 (30% profit share) with the investor but contributed zero personal equity. Your absolute return is lower (£280,000 vs £400,000), but your return on capital deployed is infinite — you made £280,000 without investing any of your own money. This frees your capital for other investments, or allows you to pursue projects you could not otherwise afford.

Profit Share Structures

Profit sharing arrangements vary depending on the level of equity provided, the project's risk profile, and the developer's track record. Here are the most common structures we arrange for Camden development projects.

Lower Risk

Co-Invest Structure

Investor provides part of the equity alongside the developer

Typical Profit Share

20-30%

to the equity investor

The developer contributes a meaningful portion of equity (typically 10-15% of costs), demonstrating commitment and alignment. The investor funds the remaining equity requirement. This structure attracts the lowest profit share because the developer has skin in the game and is sharing the risk.

Best suited to experienced Camden developers with some available capital who want to reduce but not eliminate their equity contribution.

Medium Risk

Full Equity Replacement

Investor provides 100% of the equity required

Typical Profit Share

30-40%

to the equity investor

The investor funds all of the equity, with the developer contributing zero cash. The developer's contribution is entirely through expertise, project management, and sweat equity. Combined with senior debt at 70% LTC, this structure achieves 100% funding of the project.

Ideal for developers with a proven track record but limited available capital, or those wanting to preserve capital for multiple simultaneous projects.

Higher Risk

Preferred Return + Share

Investor receives a minimum return before profit is shared

Typical Profit Share

40-50%

after preferred return

The investor receives a preferred return on their capital (typically 8-12% per annum) before any profit sharing takes place. After the preferred return is met, remaining profit is shared between developer and investor. This structure provides the investor with downside protection.

Common for larger or more complex Camden schemes, first-time developers seeking to build a track record, or projects with higher perceived risk.

Joint Venture Equity Arrangements

A joint venture (JV) is the most common legal structure for development equity arrangements. The JV creates a formal partnership between the developer and the equity investor, typically through a special purpose vehicle (SPV) company. The shareholders' agreement governing the JV sets out every aspect of the partnership, from decision-making authority to profit distribution and dispute resolution.

SPV Company Structure

A new limited company is formed specifically for the project. Both the developer and investor hold shares in proportion to their agreed interests. This ring-fences the project's assets and liabilities from both parties' other business activities, providing clean protection for all concerned.

Shareholders' Agreement

The definitive document governing the JV relationship. It covers capital contributions, profit distribution mechanics, decision-making authority (day-to-day vs reserved matters), project management arrangements, default provisions, and exit mechanisms. This agreement is negotiated before any capital is committed.

Roles & Responsibilities

Clear delineation of who does what. The developer typically manages the day-to-day project delivery — procurement, construction management, sales and marketing — while the investor has oversight and consent rights over material decisions such as budget changes, contractor appointments, and sales strategy.

Profit Distribution Waterfall

A defined sequence for distributing proceeds when units are sold. Typically: first, repay the senior lender; second, return the investor's equity capital; third, pay the investor's preferred return (if applicable); fourth, distribute remaining profit according to the agreed split between developer and investor.

The quality of the JV documentation directly affects the success of the partnership. Poorly drafted agreements lead to disputes over decision-making, cost allocation, and profit distribution. We work with solicitors who specialise in JV structures for property development, ensuring that the documentation is comprehensive, commercially balanced, and aligned with the requirements of the senior lender who will be funding the debt portion of the capital stack. For Camden projects, where the planning and conservation environment can create unexpected complexities during the build, having clear provisions for handling changes and contingencies is particularly important.

When Is Equity the Right Choice for Your Camden Project?

Development equity is not the default choice for funding a property project — it requires sharing a significant portion of your profit with an investor. The decision to bring in equity should be driven by clear strategic reasoning rather than simply the inability to fund the equity from other sources. Here are the scenarios where equity funding genuinely adds value for Camden developers.

The most compelling case for equity is business scaling. If you have the expertise and track record to deliver Camden development projects profitably, equity funding allows you to run multiple projects simultaneously rather than waiting for each to complete before starting the next. Consider a developer who can contribute £500,000 of personal equity. With senior debt only, that funds a single £1.7 million project. With equity partners providing the equity on each scheme, the same developer could be running three or four projects concurrently across different Camden neighbourhoods — perhaps a conversion in Bloomsbury, a new build near Swiss Cottage, and a refurbishment in Kentish Town — generating aggregate profits that far exceed what a single project would deliver.

Equity is also the right choice when you have identified an exceptional opportunity but lack sufficient capital to fund the equity requirement. Camden's property market occasionally presents opportunities that justify accepting a profit share because the absolute return is still highly attractive. A scheme generating £800,000 of net profit with a 30% equity partner leaves the developer with £560,000 — a return that justifies bringing in external capital, especially if the alternative was not doing the project at all.

Finally, equity partnerships provide valuable risk sharing. Development is inherently uncertain — construction costs can overrun, planning conditions may impose unexpected requirements, and market conditions can shift during a 12-18 month build programme. Having an equity partner means you are not carrying 100% of the downside risk on your personal balance sheet. For developers who want to grow their business sustainably without taking on excessive personal risk, equity partnerships provide a responsible framework for ambitious growth.

Equity Is Right When:

  • You want to run multiple projects simultaneously
  • You have identified an exceptional opportunity beyond your current capital
  • You want to share risk on a larger or more complex scheme
  • You are building a development business and need to preserve working capital
  • The project margins are strong enough to absorb the profit share

Equity May Not Be Right When:

  • You have sufficient personal capital and prefer to retain all profit
  • Project margins are thin and the profit share would make returns unattractive
  • You are uncomfortable sharing decision-making authority
  • Mezzanine finance could achieve the same leverage at lower overall cost
  • The project is small and the fixed costs of structuring outweigh the benefits

Find the Right Equity Partner for Your Camden Project

We'll introduce you to suitable equity investors, structure the deal, and coordinate with senior lenders. Free, confidential consultation.

Development Equity FAQ

Detailed answers to common questions about equity funding and joint ventures for Camden property development projects.

Development equity funding involves an investor providing the equity portion of a development project's capital stack in exchange for a share of the profit generated upon completion. Unlike debt finance (such as senior loans or mezzanine), equity is not a loan that accrues interest — instead, the equity investor shares in the upside (and downside) of the project. When combined with senior debt, equity funding can cover up to 100% of total project costs, meaning the developer contributes expertise and project management rather than personal capital. This model is particularly valuable for experienced Camden developers who have the skills and track record to deliver profitable schemes but want to preserve or recycle their capital more efficiently.
Equity investors typically require a profit share of 20% to 50% of the net development profit. The exact percentage depends on several factors: the proportion of equity being provided (higher equity contribution means higher profit share), the risk profile of the project, the developer's track record, the security of the projected returns, and the prevailing market conditions. For a straightforward residential scheme in a strong Camden location with an experienced developer, profit shares tend to sit at the lower end (20-30%). For higher-risk schemes, first-time developers, or projects requiring 100% of costs to be covered, profit shares move towards 40-50%. We negotiate terms that balance the investor's return requirements with the developer's need to retain sufficient profit to justify the project.
A joint venture (JV) is a collaborative arrangement where two or more parties come together to deliver a development project, each contributing different resources. In the most common JV structure for Camden developments, one party (the developer) contributes expertise, project management, and local market knowledge, while the other party (the investor) provides the equity capital. The joint venture is typically structured through a special purpose vehicle (SPV) — a limited company set up specifically for the project — with a shareholders' agreement governing the relationship, decision-making processes, profit distribution, and exit provisions. JVs offer flexibility in how roles, responsibilities, and rewards are shared between the parties.
Development equity and mezzanine finance both fill the gap between senior debt and the developer's own capital, but they work in fundamentally different ways. Mezzanine finance is debt: it carries a fixed monthly interest rate (typically 1.0-1.5% per month), must be repaid regardless of the project's profitability, and is secured by a second charge over the property. Equity is investment: there is no monthly interest charge, the investor's return comes solely from a share of the project's profit, and there is no additional charge on the property (the equity investor's interest is through their shareholding in the SPV). If a project underperforms, debt still needs to be repaid; with equity, the investor shares in any shortfall. Conversely, if a project significantly outperforms, the equity investor participates in the upside, whereas mezzanine interest costs are fixed.
Development equity for Camden projects comes from several sources. High-net-worth individuals (HNWIs) are the most common equity partners for schemes under £5 million — these are typically successful professionals or business owners looking for higher returns than traditional investments. Family offices provide equity for mid-size schemes, often with a longer-term investment horizon. Private equity funds and institutional investors participate in larger projects, typically £5 million and above, and may fund portfolios of schemes rather than individual projects. Our network includes investors across all categories, and we match the right investor profile to your specific project's size, risk profile, and timeline.
The level of control you retain depends on the terms negotiated in the shareholders' agreement. In most developer-led JV structures, the developer retains day-to-day operational control of the project, including decisions about contractors, design, marketing, and sales strategy. The equity investor typically has consent rights over major decisions such as changes to the overall budget, amendments to the planning application, appointment or removal of the main contractor, and the sale strategy for completed units. We structure agreements that give investors appropriate oversight and protection while ensuring the developer has the operational freedom needed to deliver the project efficiently. The key is clear communication and well-defined boundaries from the outset.
Equity investors place significant weight on the developer's track record because their return is entirely dependent on the project's success. For smaller schemes (under £2 million total costs), investors typically want to see at least 2-3 completed projects, preferably including schemes of similar type and scale in comparable London locations. For larger projects, a more extensive track record of 5+ completions is usually expected. First-time developers can sometimes attract equity if they have a particularly strong background (for example, senior experience in construction management or real estate) and are partnered with experienced professionals. We help present your track record in the most compelling way and match you with investors whose risk appetite aligns with your experience level.
Arranging development equity typically takes 4-8 weeks from initial introduction to completion of the legal documentation. The process involves: preparation of an investment memorandum presenting the project opportunity (1 week), introduction to suitable equity investors from our network (1-2 weeks), investor due diligence and negotiation of heads of terms (2-3 weeks), and legal documentation including the shareholders' agreement, SPV formation, and coordination with the senior lender (2-3 weeks). The timeline can be shorter if the project is well-prepared and the investor is motivated, or longer if the deal structure is complex or there are multiple potential investors to manage.
In an equity structure, the investor shares in the downside as well as the upside. If the project generates less profit than projected, both the developer and the investor receive a smaller return. Most equity agreements include a minimum return hurdle for the investor — typically their capital returned plus a preferred return of 8-12% per annum — before any profit is shared with the developer. If the project just about breaks even, the investor would receive their capital back but little or no profit, and the developer would receive nothing beyond any project management fees agreed in advance. In a worst-case scenario where the project makes a loss, the equity investor bears the loss on their invested capital (after the senior lender has been repaid). This risk sharing is what justifies the profit share arrangement.
While technically possible, combining equity and mezzanine is relatively unusual for standard development projects. The reason is that equity and mezzanine serve a similar purpose — filling the gap between senior debt and the developer's own resources. If an equity investor is providing the equity portion, there is typically no need for mezzanine as well. However, there are scenarios where a blended approach makes sense: for example, an investor provides equity to cover 50% of the gap (taking a moderate profit share) with mezzanine covering the remainder (at a fixed interest rate). This can optimise the developer's cost of capital by blending the profit share and interest costs. We model these hybrid structures to determine whether they offer a genuine advantage for specific Camden projects.
The core legal documents for a development equity arrangement include: a shareholders' agreement governing the relationship between the developer and investor, the SPV's articles of association (often bespoke rather than standard), a development management agreement setting out the developer's role, fees, and obligations, board minutes and resolutions for key decisions, and coordination documents with the senior lender who may require certain provisions in the shareholders' agreement. If the equity is structured as a loan to the SPV rather than share capital (a common approach for tax efficiency), a loan agreement and potentially a security document will also be required. We work with solicitors experienced in JV structures to ensure the documentation properly protects both parties and does not create any issues with the senior lender.

Related Finance Solutions

Equity works alongside debt products to create a complete capital structure. Explore the full range of funding solutions for your Camden development.

Development Finance

Up to 70% LTC

Senior debt facilities forming the foundation of your capital stack. Up to 70% LTC. Equity partners provide the remaining capital requirement above this.

Learn More

Bridging Finance

5-10 day completion

Short-term funding for property acquisition. Can be used to secure a site before arranging the full equity and development finance structure.

Learn More

Mezzanine Finance

Up to 90% LTC

An alternative to equity for reducing your cash contribution. Second charge lending at a fixed interest rate rather than a profit share arrangement.

Learn More

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Discuss Equity Funding for Your Camden Development

Whether you need a co-invest partner for a single project or a portfolio-level equity relationship, we'll connect you with the right investors.