The IA Sector is the process of classing funds with similar characteristics together and represents the UK investment management industry.

An investment memorandum is a document that is given to investors in a private placement deal. It sets out the placements objectives, risks, financials, and deal terms.

The time allocated for deploying committed capital into specific assets or projects

An investment strategy is a set of rules, behaviours, or procedures designed to guide an investor's selection of an investment portfolio.

A structured entity or financial instrument that allows investors to channel their funds into various assets or markets.

The J-curve describes the development in stages of a private equity fund’s returns, generating negative results in the initial years due to acquisition costs and initial losses, followed by returns exceeding costs in later years through the disposition of individual investments.

The Jumpstart Our Business Startups Act is a U.S. law enacted in 2012 aimed at encouraging the funding of small businesses by easing various securities regulations. It includes provisions that make it easier for companies to go public and for private companies to raise capital.

Junk bonds are high-yield or non-investment grade bonds with a rating of 'BB' or lower due to their high default risk or junk bonds debts issued by companies or governments which are at high risk of default, either by not paying their interest or repaying their capital at maturity. Levels of interest are high to compensate for the risks involved to the bondholder.

Key person risk is the risk to business operations if one of these critical employees is out for an extended period of time for reasons including, but not limited to, health, sabbatical or parental leave.

Leasehold is a method of acquiring property for a fixed term without buying the land it is on.

Leverage refers to the use of debt (borrowed funds) to amplify returns from an investment or project. Investors use leverage to multiply their buying power in the market.

Leverage ratio serves as a broad term encompassing various metrics that quantify the extent of borrowed funds relative to invested capital or assets within a specific investment or venture. The most common types of leverage ratio include:- Debt to Equity (D/E)- Debt to Asset (D/A)- Loan to Value (LTV)- Loan to Cost (LTC)- Debt Service Coverage Ratio (DSCR)- Interest Coverage Ratio (ICR)- Equity Multiplier

An LBO involves using a significant amount of borrowed money, often through loans or bonds secured by the assets of the acquired company, to finance the acquisition. The purchased company's assets are usually used as collateral for the loan.

A lien refers to a legal claim or right granted to a creditor against a borrower's property or assets as security for a debt or obligation. It provides the creditor with the right to take possession of the property or assets in the event of default or non-payment by the borrower.

A limited partner is an investor who has no control over the day-to-day management of the business.

The limited partnership agreement sets out the legally binding relations between the limited partner and the general partner.

Liquidity refers to the ease with which an asset, or security, can be converted into cash without affecting its market price.

A liquidity premium is an incremental return that compensates an investor for owning an asset that is not highly liquid.

Liquidity risk refers to the potential difficulty an entity may face in meeting its short-term financial obligations due to an inability to convert assets into cash without incurring a substantial loss.

Ratio determining the value of the loan, compared to the total project cost. Loan to Cost = Loan Amount / Total Project Cost

Ratio determining the value of the loan, compared to the project's market value. Loan to Value = Loan Amount / Project Market Value

The London Interbank Offered Rate is a benchmark interest rate at which major global banks lend to one another.

LIBOR is a benchmark interest rate that reflects the average rate at which major banks based in London can borrow from one another in various currencies. It was historically used as a reference rate for various financial products globally. However, due to issues related to manipulation and the decline in transaction volumes on which it was based, regulators encouraged its replacement. As of recent times, many markets have transitioned away from LIBOR to alternative benchmark rates, such as the Secured Overnight Financing Rate (SOFR) in the United States and the Sterling Overnight Index Average (SONIA) in the UK, among others

The London Stock Exchange is the primary stock exchange in the UK, comprising 1,300 companies listed on the main market and the Alternative Investment Market.

Machine learning is the process in which technology, through a machine, combs through data to make insights and observations based on any correlations found.

Macroeconomics is the branch of economics that deals with the structure, performance, behaviour, and decision-making of the whole economy. This mainly focuses on economic growth and shorter-term business cycle.

The main market is the principal market of the London Stock Exchange where larger, more established companies are listed and traded.

A management buy-in is a transaction where an external management team buys an ownership stake in a company and replaces the existing management team.

A management buy-out is the acquisition of a company by its own company management with support from investors providing additional capital.

Management fees are regular charges paid by investors to managers of investment funds for the service of managing investment funds or accounts.

A provision within the fund's structure that allows the General Partner (GP) to offset a portion of the management fee against other fees or expenses accrued by the fund.

The total value of a company's outstanding shares in the market, calculated by multiplying the current share price by the total number of outstanding shares.

Market risk is the risk of financial losses due to the performance of the market.

Market value is the price an asset would fetch in the marketplace, or the value that the investment community gives to a particular equity or business.

EU legislation that governs the operation of financial markets, aiming to improve transparency, investor protection, and efficiency in trading various financial instruments within the EU.

A master fund is the central vehicle where the pooled investment occurs.

A master-feeder structure is an investment structure used by funds to pool capital raised by separate feeder funds into a single master fund to simplify management.

The metaverse is a digital reality that combines aspects of social media, online gaming, augmented reality, virtual reality, and cryptocurrencies to allow users to interact virtually.

Mezzanine debt is when a hybrid debt issue is subordinated to another debt issue from the same issuer. Mezzanine debt bridges the gap between debt and equity financing and is one of the highest-risk forms of debt-being subordinate to pure debt but senior to pure equity.

Monetary policy is a form of economic legislation used by the government or central bank to control the supply of money, availability of money, and rate of interest to stabilize the economy.

Mortgage-backed securities (MBS) are variations of asset-backed securities that are formed by pooling together mortgages exclusively. The investor who buys a mortgage-backed security is essentially lending money to home buyers.

An Islamic financial contract based on a profit-sharing partnership. It involves two parties: the Rab al-Maal (capital provider) who contributes funds, and the Mudarib (entrepreneur) who manages the invested capital and conducts business operations. Profits generated from the venture are shared according to a pre-agreed ratio, while the capital provider bears the losses, except in cases of negligence or misconduct by the entrepreneur.

Multifamily real estate is a housing classification where multiple separate housing units, such as apartments or condos, for residential inhabitants are contained within one building or several buildings within one complex.

MOIC is a measure used to quantify the returns generated from an investment relative to the amount of capital initially invested. It can be calculated using the equation: MOIC = Total Value / Invested Capital.

Musharaka is an investment partnership in which profit sharing terms are agreed in advance, and losses are pegged to the amount invested.

A mutual fund is an investment program funded by shareholders that trades in diversified holdings and is managed by professional investment managers.

A term applied to companies, funds, partnerships, trusts or other investment entities that describes the current value of the entity, usually expressed on a per-share basis.

Net effective rent (NER) is a calculation of average monthly rental cost that incorporates landlord rental concessions, typically a free month of rent.

Net operating income measures an income-producing property's profitability before deducting in any costs from financing or taxes. The equation to calculate it is: NOI = Gross operating income - operating expenses.

A net operating loss exists if a company’s deductions exceed taxable income. This can lead to tax benefits and restricting opportunities for investors.

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project by comparing the present value of its expected cash flows to the initial investment outlay. It helps in determining whether an investment is worthwhile by considering the time value of money.

Net zero is measure of the amount of energy used in emissions. It means that the emissions of a project or company are balanced by equivalent removals of carbon from the atmosphere.

Non-recourse is a type of loan secured by collateral, where the borrower is not personally liable if they default on the loan.

Total expenses associated with managing and operating an investment fund. These charges encompass various costs incurred by the fund over a given period, usually calculated annually, and are expressed as a percentage of the fund's average net assets.

Open-ended investment company is a type of mutual fund that does not have restrictions on the amount of shares the fund will issue.

Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, people or systems in a company when it attempts to do its day-to-day business.

Opportunistic real estate investments are usually associated with little to no in-place rent roll, require significant rehabilitation or even entail ground-up development.

Opportunity zones represent economically distressed communities that are in need of investment and revitalization. These areas have tax benefits for investors who invest in them through a qualified opportunity fund.

An originator typically refers to a lender or creditor who assists in determining the terms of a loan.

The PIC multiple is calculated by dividing paid-in capital by committed capital. This ratio shows a potential investor the percentage of a fund’s committed capital that has actually been drawn down.

Pari Passu is a Latin phrase meaning “equal footing” that describes situations where two or more assets, securities, creditors, or obligations are equally managed without preference.

A participation agreement is a legal contract or document that outlines the terms and conditions governing the participation of multiple parties in a specific transaction, project, or venture. It establishes the rights, responsibilities, and obligations of each participating entity or individual involved in the arrangement.

A business that does not pay income tax of its own. Its income, losses, credits, and deductions ‘pass-through’ to each business owner's personal tax return, where its profits are taxed according to each owner's individual income tax rate.

Passive investment is an investment strategy involving limited ongoing buying and selling actions.

The payback period is the length of time it takes to recover the cost of an investment or the length of time an investor needs to reach a breakeven point.

Payment frequency refers to the regular intervals at which payments are made for financial obligations, investments, loans, or other contractual arrangements. It specifies how often a payment, such as interest, principal, dividends, or rent, is due and disbursed to the recipient.

Payment in Kind (PIK) refers to a method of making payments on a financial obligation, such as interest on a loan or dividends on preferred stock, by issuing additional securities or instruments rather than paying in cash.

This fee represents the share of profits that the GP receives from successful investments. It's usually calculated as a percentage of the fund's profits after a certain hurdle rate (preferred return) is achieved and is meant to align the interests of the GP with those of the Limited Partners (LPs). Also referred to as Carried Interest.

A periodic review refers to a scheduled assessment or evaluation conducted at regular intervals to analyse the performance and status of investments

Political risk is the risk that investors, firms, organizations, and countries, will lose money or make less money than expected, due to political decisions, conditions, or events occurring in the country or emerging market in which they have invested.

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Pooled investment vehicles are investment funds where multiple investors contribute assets and share in the profits and losses.

Post-settlement funding is a cash advance provided to plaintiffs awaiting the payout of their settlement in a lawsuit.

Preferred equity is a hybrid form of investment that combines characteristics of both equity and debt. Preferred equity has priority over common equity when it comes to distributions and claim of assets in the event of liquidation.

Preferred return is the minimum return limited partners must earn before the general partner can collect carried interest.

A prepayment penalty is a fee that is charged to a borrower who pays off a loan before it is due.

Private equity is a form of capital investment made into companies that are not publicly traded on a stock exchange. Investments in private equity are typically made by private equity firms, venture capital firms, or angel investors, with the goal of funding new technology, making acquisitions, expanding working capital, or strengthening a company's balance sheet.

A private equity fund is a pooled investment vehicle where funds are collected from institutional and individual investors for the purpose of making investments in private companies. Managed by private equity firms, these funds typically have a longer investment horizon and focus on acquiring significant or controlling stakes in companies with the aim of restructuring, growing, or improving them for a future exit.

Private markets are part of the capital markets that involve investments into securities that are not publicly traded on a stock exchange.

A Private Placement Memorandum (PPM) is a legal document used in private offerings of securities to provide potential investors with detailed information about an investment opportunity. It is typically utilized in fundraising efforts by companies seeking to raise capital.

Pro rata is proportionally, found in areas like dividends, which are awarded to investors based on their proportion of investment.

The distribution of profits realized from successful investments among the stakeholders, typically the General Partners (GPs) and Limited Partners (LPs).

Proof of address is a basic document such as a residence permit or a lease agreement that verifies where an individual lives.

Property bonds are asset backed securities used by developers to raise money from investors in the form of a loan.

Property management is the management and overseeing of a real estate asset by a property management firm or property manager.

Property preservation is the process of maintaining the inside and outside of a property that may be occupied or vacant. The objective of property preservation is to keep a vacant property in tip-top condition.

Public markets are part of the capital markets that involves the issuance of stocks and bonds to the public, typically through a stock exchange.

A Purchase Lease Option is a legal mechanism that allows someone to control a property and produce income from it, with the right to purchase the property at a later date, but not the obligation to do so.

Quantitative easing is a monetary policy tool used by central banks to stimulate the economy when standard monetary policy has become ineffective. They do this by buying a predetermined amount of government bonds or other financial assets in order to inject money directly into the economy, hoping to encourage increased lending.

A measure of how an investment is performing in its peer group.

Real estate crowdfunding refers to a method of raising funds from a large number of individuals or investors to finance real estate projects or properties. It utilizes online platforms or websites that connect investors with real estate developers or property owners seeking funding for their projects.

Real estate depreciation is an accounting method used to allocate the cost of a property over its useful life for tax and accounting purposes. It recognizes that buildings and certain improvements have a limited lifespan and their value declines over time due to wear and tear, deterioration, or obsolescence.