A summary of certain risks of investing in Fund I.
The following is a summary of certain risks of an investment in Geneva Income Opportunity Fund I, L.P. It is not complete. A detailed description of the risks associated with the offering is found in the section of the private placement memorandum entitled “Risk Factors,” which investors should read in its entirety before making any investment decision.
An investment in the Fund is speculative and involves a high degree of risk, including the risk of loss of your entire investment.
Interests in the Fund are illiquid, are not registered under the securities laws, and are subject to significant restrictions on transfer. There is no public market for the interests and none is expected to develop. Investors must be prepared to hold their investment for the long term.
The Fund is newly organized and has no operating history. Past performance of The Geneva Group and its affiliates is not indicative of the future results of the Fund.
The Fund may not have identified all of the assets it will acquire. Investments will not be identified before investors commit, and investors must rely on the Investment Adviser to select and manage investments.
The success of the Fund depends substantially on the efforts and judgment of the General Partner, the Investment Adviser, and their principals. Limited partners have no role in investment decisions, and the loss of key personnel could adversely affect the Fund.
Commercial real estate values and income are affected by economic conditions, local market dynamics, tenant demand, competition, and other factors outside the Investment Adviser’s control.
The Fund expects to use debt financing. Leverage magnifies both gains and losses, and rising interest rates or unavailability of financing could adversely affect returns.
Outparcel development and build-to-suit construction involve cost overruns, delays, permitting and entitlement issues, contractor risk, and the risk that completed space does not lease on schedule or at projected rents.
The Fund’s investments are expected to be concentrated in neighborhood retail centers and outparcel development in Sunbelt markets, which increases exposure to regional, sector-specific, and retail-industry downturns.
Brick-and-mortar retail is subject to pressure from e-commerce, discount formats, changing consumer behavior, and tenant bankruptcies, which could adversely affect the Fund’s ability to lease and dispose of its properties.
Tenant defaults, non-renewals, and extended vacancy periods could reduce cash flow and distributions.
An owner of real property may be liable for the cost of removing or remediating hazardous substances, whether or not it caused them, and that cost could exceed the value of the property. Properties may also require modifications to comply with the Americans with Disabilities Act, which could reduce cash available for distribution.
Insurance may not cover all losses. Losses from catastrophic events such as floods or high winds may be subject to coverage limits, insurance may not be available at a reasonable cost or in sufficient amounts, and insurance costs could increase.
Distributions are not guaranteed; their amount and timing are in the General Partner’s discretion, and they may fluctuate or be suspended. Proceeds from capital events may be reinvested rather than distributed. Amounts distributed may be added back to an investor’s outstanding capital commitment and be subject to recall by the Fund.
Investors commit capital that is drawn over time as needed. Failure to fund a capital call when due can result in significant consequences, including forfeiture of up to 100% of a defaulting investor’s interest in the Fund, and previously received distributions may be subject to recall.
An investment in the Fund involves complex federal, state, and local tax considerations. Investors should consult their own tax advisors.
The Fund does not expect to provide audited financial statements. Reports to investors are expected to be unaudited.
No federal or state securities regulator has reviewed or passed upon this offering, the private placement memorandum, or this summary.
The General Partner, the Investment Adviser, and their affiliates engage in other real estate activities and receive acquisition, property management, construction management, and other fees from the Fund that were not negotiated at arm’s length, which may give rise to conflicts of interest.
The General Partner’s carried interest may create an incentive for the Investment Adviser to make more speculative investments than it would in the absence of performance-based compensation.
Certain investors may invest on different terms, including with respect to fees, distributions, liquidity, or information rights, under side letters. The General Partner is not required to notify other investors of those terms.
Investors admitted at later closings will participate in existing investments and contribute their share of prior capital calls plus interest. That payment may not reflect the fair value of those investments and may dilute earlier investors.
Neither the Investment Adviser nor the General Partner is registered under the Investment Advisers Act of 1940. Changes in registration requirements could require registration and delay the Fund’s pursuit of its investment objectives.
Cyber-attacks, security breaches, or system failures affecting the Fund, its investments, or its service providers could disrupt operations, compromise investor information, or cause financial loss.
Nelson Mullins Riley & Scarborough LLP has been retained by the Investment Adviser in connection with the Fund and does not represent any investor or prospective investor. Investors should retain their own independent counsel.
