“making moneywhile doing good”

Executive Summary 5

Social Housing Program Overview 8

Investment Strategy 10

Strong Rental Cashflow 12

Housing Choice Voucher Program 15

Fair Market Rents 16

Why Invest in Chicago 19

About Us & Our Partners 20

Why Should I Invest Now? 21

Buying Process & Returns 22

T he Colonial Capital Group Secured Fixed Rate Bond (SHB) launched in February 2014 with the express

objective of re-housing up to 2,000 families in the Chicago area.

Over the 3 year period an investor will receive returns equal to

12% per annum, paid every 6 months.

The SHB is a Socially Responsible Investment (SRI) as our main

objective is to help provide safe, clean and decent housing to

either the very low or low-income families in the Chicago area.

On each sale made we also donate $50 to Kiva which helps

to fight worldwide poverty. More information can be found about

this at www.kiva.org/team/colonial_capital/

The US housing market has been on a downward path since it

reached an all-time high in late 2006 early 2007. However, after

plummeting over 50% in some areas the consensus is we may

have finally found a bottom to the market. The graph below

(Figure 1) shows that the vast majority of the drop in prices

occurred between mid-2006 and early 2009.

Executive Summary

Social Housing Bond

12% return per annum

COLONIALCAPITAL

100

95

90

85

80

75

70

65

60

55

50

2006

Source: Clear Capital Home Data Index

Rel

ativ

e In

dex

Valu

e

2007 2008 2009 2010 2011 2012 2013 2014

Figure 1U.S. National Prices Historical

4 5

W hilst the property prices have dropped, foreclosures have sky rocketed forcing many

thousands out of their homes.

This in turn has increased the demand for good rental properties and this has been further

compounded by the banks in the US keeping a very tight rein on mortgage finance.

This restriction of credit is forcing not just those that have lost their homes into the rented sector

but also first time buyers. This “perfect storm” has created an excellent opportunity for theastute property investor in the US housing market.

The Colonial Capital Group plc 3 year US Social Housing Bond has been designed to

allow both private and institutional investors an opportunity to benefit from these circumstances

with returns of 12% per annum. This is asset backed and secured upon the shares of Colonial

Capital LLC.

The bonds benefit from a first ranking charge over the shares in Colonial Capital Property LLC,

the company in the US that holds all of the properties funded by the bonds. In the event of non-

payment, the bondholders would have the ability to enforce their security, take control of Colonial

Capital Property LLC and realise the value of its property portfolio subject to the prior

claims of any trade creditors of Colonial Capital Property LLC. More details can be found in the

Information Memorandum (IM).

COLONIALCAPITAL

12% per annumThis is asset backed and secured upon the propertyheld and managed by Colonial Capital LLC

12%

10%

8%

6%

4%

2%

0%

1995

-01

1995

-06

1995

-12

1996

-06

1996

-12

1997

-06

1997

-12

1998

-06

1998

-12

1999

-06

1999

-12

2000

-06

2000

-12

2001

-06

2001

-12

2002

-06

2002

-12

2003

-06

2003

-12

2004

-06

2004

-12

2005

-06

2005

-12

2006

-06

2006

-12

2007

-06

2007

-12

2008

-06

2008

-12

2009

-06

2009

-12

2010

-06

2010

-12

2011

-06

2011

-12

2012

-06

2012

-12

2013

-06

2013

-12

% o

f Act

ive

Loan

s

DEC-054.27%

JAN-1010.57%

AUG-126.87%

Total Delinquent and Foreclosure Percent by Month

Delinquent

DEC-050.44%

AUG-124.04%

Foreclosure

Executive Summary

6 7

3 Year SocialHousing Bond

Started in Chicago in 2012

C olonial Capital LLC acquires distressed property, typically 2-4 unit multi dwelling houses in

both West and South Chicago. After a comprehensive refurbishment process we let

these properties to US families under the Housing Choice Voucher (HCV) Program, formerly

known as Section 8. This allows the company to achieve high rental yields that are paid and

underwritten by the US Government.

In some cases the company may sell a proportion of its portfolio to help accelerate growth and

use leverage where appropriate.

There is a minimum initial investment of £10,000 and subsequent purchases at £1,000.

The annual returns are 12% of the sum invested which is paid bi-annually. The start date for

the annual returns is exactly 6 months after the final date of subscription. This allows for

administration, property acquisition, refurbishment and rental.

The final redemption payment is paid after 3 years.

Social Housing Program Overview

8 9

The table below shows the Housing & Urban Development* (HUD) department’s agreed rent

payable in Chicago for 2014.

One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom

$826 $979 $1,248 $1,455

We can acquire a 2 unit property for as little as $30,000 - $35,000 and refurbish it for

approximately another $30,000. A 2 unit property with one 2 bed and one 3 bed apartment will

produce a rental income of $26,364 per annum. If we take an acquisition and refurbishment

cost of $65,000 we will achieve an un-leveraged yield of 40.5%.

Another option is to acquire, refurbish and sell. The above example could possibly be sold for

$100,000 and still produce an un-leveraged yield of 26.4% per annum for a buy to let investor.**

The figures achieved are even better on a 3 unit dwelling. In this example the property has one

2 bed and two 3 bed apartments. A typical acquisition and refurbish cost would be approximately

$80,000. The rental income generated by this property would be $41,700. This would

provide an un-leveraged yield of 52.1% or an un-leveraged profit of $86,800 if we sold at a

cap rate of 25%. The sale of just one of these 3 apartment properties generates enough cash to

cover all the Bond interest payments and the final redemption payment (based on an investment

of $80,000, see below.)

Rental Income as per FMR $41,700 Redemption Payment @ 100% $80,000

Sale Proceeds $166,800 Total Repaid to Bondholder $108,800

Bond Investment $80,000 Bond Interest @ 12% per annum $9,600

Property Type: 3 Apartments 8 Beds Total Bond Interest Payable $28,800

Cap Rate 25%

All of the returns shown above are un-leveraged.

The Fair Market Rent (FMR) is set by the Housing & Urban Development department and is paid direct to either the investor

or the investor’s agent, thus guaranteeing a certain level of rental income.

All funds invested are secured against the shares of Colonial Capital LLC, which in turn owns the entire property portfolio.

* The HUD is a US Governmental Department

** Investors who wish to buy property outright should contact us direct

W e focus on multi-unit dwellings which contain between 2 – 4 apartments. All properties

are bought direct from US banks or via Foreclosure sales and are refurbished to a highstandard, which includes new kitchens, bathrooms, windows and wooden floors.

Yields achieved are sufficient to deliver the necessary dividend returns to the Bond

investors whilst allowing the company to continue to grow.

Throughout the three year term, we will actively manage each property to maximise thereturns. This will include a mixed strategy of buy & hold, buy & sell at the most appropriate times.

We expect to undertake more property dealing in the first 18 months whilst prices are particularly

low, which will help to accelerate growth before switching to a longer holding strategy as the

redemption dates approach.

Investment Strategy

re-house 2,000 families

10 11

As more people are forced to become renters, the demand for rental property increasesand this creates upward pressure on rental prices as can be seen in the graph below.

1 People who have suffered from a foreclosure still need somewhere to live and therefore their

only option is to rent.

2 First time buyers cannot get a mortgage to buy a property so they are forced to rent instead.

3 Voluntary Default, whereby a regular borrower hands back their keys because they are in a

negative equity position and they decide they would be better off renting.

There has been a steady and inexorable rise in the price of rental income across the US since way

back in 1983.

The homeownership levelhas fallen byapproximately 6 million homessince 2007

Strong Rental Cashflow

1970

62

64

66

68

70

1975 1980 1985 1990 1995 2000 2005 2010

Home Ownership Rate: United States

Source: Cesus Bureau/Haver Analytics

1970

1972

1974

1976

1978

1980

1982

1986

1984

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

$175,000

$200,000

$225,000

$250,000

$275,000

$300,000

$325,000United States - House Prices

http://housingbubble.jparsons.net

Inflation-adjusted houses pricesNominal house pricesInflation-adjusted pre-bubble trendNominal pre-bubble trend

12 13

T he Housing Choice Voucher program is the US Federal Government’s major programfor assisting very low and low-income families, the elderly and the disabled to afford decent,

safe and sanitary housing in the private market. Since housing assistance is provided on behalf of

the family or individual, participants are able to find their own housing, including single-family

homes, townhouses and apartments.

The participant is free to choose any housing that meets the requirements of the program

and is not limited to units located in subsidised housing projects.

Housing choice vouchers are administered locally by public housing agencies (PHAs). The PHAs

receive federal funds from the U.S. Department of Housing and Urban Development(HUD) to administer the voucher program.

A family that is issued a housing voucher is responsible for finding a suitable housing unit of the

family’s choice where the owner agrees to rent under the program. Rental units must meet

minimum standards of health and safety, as determined by the PHA.

A housing subsidy is paid to the landlord directly by the PHA on behalf of the participating

family. The family then pays the difference between the actual rent charged by the landlord and

the amount subsidised by the program. Under certain circumstances if authorised by the PHA, a

family may use its voucher to purchase a modest home.

The Rent SubsidyThe PHA calculates the maximum amount of housing assistance allowable. The maximum

housing assistance is generally the lesser of the payment standard minus 30% of the family’s

monthly adjusted income or the gross rent for the unit minus 30% of monthly adjusted income.

All rental payments are paid direct from the US Government department HUD into our managing

agent’s bank account before being passed directly to Colonial Capital LLC.

What is the Housing Choice Voucher Program?the

properties let new

prospective tenants

theproperties

let newprospective tenants

14 15

T he Fair Market Rent is the 40th percentile of gross rents for typical, non-substandard rental

units occupied by recent movers in a local housing market.

40th percentile: The 40th percentile is that point in a distribution of numbers at which 40% of the

numbers are less than or equal to it and 60% of the numbers are greater than or equal to it. In the

set of numbers {$395, $458, $486, $517, $675}, $458 would be the 40th percentile. The 40th

percentile is similar in concept to a median; the median is the 50th percentile.

Gross rents: Gross rent is the sum of the rent paid to the owner plus any utility costs incurred by

the tenant. Utilities include electricity, gas, water and sewer and trash removal services but not

telephone services. If the owner pays for all utilities then gross rent equals the rent paid to the owner.

One Strike PolicyUnlike the UK, where unruly tenants seem to repeatedly get re-housed, this does not happen

in the US under the HCV program thus protecting our investment. If the tenants do not pass any

of the routine inspections or fail to pay just one monthly rent, they are given 30 days to rectify

the problem and if this isn’t done they can be evicted.

Any tenant evicted from the HCV Section 8 home cannot get back into the scheme anywhere in

the US. Under the scheme the HCV Section 8 payments can cover from 70% up to 100% of the

tenant’s rent.

Obviously tenants try hard to not lose this support thus ensuring the property remains

in good condition and in most cases treating it as if it were their own.

Element 1990 Census American Housing Random Digit Dialing Public CommentSurvey Survey

Gross Rent Recorded by census Recorded by AHS Respondents indicate Varies. If the commentutilities they pay for and contains an RDD, HUD willHUD estimates monthly estimate utility costs usingcosts from local housing local housing authorityauthority data data. Otherwise, HUD will

estimate from 1990 census

Recent mover Moved in past 15 months Moved in past Moved in past If public comment does18-22 months 12-15 months not contain recent mover

information, HUD willestimate from 1990 census

Public Housing Adjusted HUD based Eliminated by HUD from Eliminated in survey Varies. HUD can estimateon AHS AHS information from AHS data

Built in past 2 years Eliminated by Census Eliminated by HUD from Eliminated in survey Varies. HUD can estimateBureau in extract AHS information from 1990 census

Substandard units Census extract excludes HUD uses AHS definitions No separate adjustment Varies. HUD makesunits with major of serious problems adjustment if neededdeficiencies HUD makesfurther adjustment based on AHS

Seasonal units Census extract excluded Excluded by HUD from Eliminated in survey VariesAHS information

Atypical Census extract excluded Excluded by HUD from Eliminated in survey VariesAHS information

Fair Market Rents

16 17

Diverse EconomyChicago is home to more than 400 major corporate headquarters, including 27 Fortune500 Headquarters. Rated #1 Large US Metro for Economic Diversity by Moody’s Investor

Services, Chicago is a key player in every economic sector from risk management innovation to

manufacturing to information technology to health services.

Trading PostThe most distinctive aspect of Chicago’s financial services community is also among its oldest.

The city’s derivatives exchange community, which started with commodity futures trading at theChicago Board of Trade in 1848, established the city as a global financial centre. To this day,

even though the trading of derivatives is conducted on an ever-expanding international scale,

Chicago arguably remains the geographic centre of global derivatives trading – in terms of

markets, scale and talent.

• Over $3 billion in global derivatives trading volume, nearly 2x the trading volume of New York.

• Chicago futures and options exchanges collectively dominate exchange-based derivatives

trading, with over 4 billion contracts traded in 2013.

• Chicago futures and options exchanges collectively dominate exchange-based derivatives

trading, with 51% of exchange based derivatives trading in the U.S.

Since 2000, the volume of global derivatives trading has increased from a little over 2 billioncontracts traded to more than 4 billion per year in 2013.

Growing EconomyChicago continues to grow: total trade surpassed $160 billion in 2010 (up from $95 billion

in 2004). Chicago is top-ranked for economic potential among major cities across the world and

in 2010, World Business Chicago identified more than 230 medium-sized new & expanding

facilities announced, under development or completed in the metro area, representing a total of

more than 14 million square feet and nearly $2 billion in economic development activity. In

August 2010, Inc.Magazine included 202 companies from the Chicago region in its annual list of

the 5,000 fastest-growing companies in the U.S., placing Chicago 4th among metro

regions for number of ‘Inc. 5000’ companies; the city itself ranked second with 101 companies.

Source: www.worldbusinesschicago.com/data/economy

Why Invest in Chicago

Chicago

400 majorcorporations

18 19

* Figures dependent on date of investment. Please ask your agent for figures based on your own circumstances.

Our company has been established to take advantage of the dislocation in the US housing

market and to provide both private and institutional investors with above average asset

backed returns.

The management team has over 40 years combined property experience and currently

manages in excess of 1,000 properties across the Chicagoland area.

All property acquisitions, sales and title insurance services are managed by the Chicago Title

Company, who have been in business for 160 years and have branches across 40 states,

making them one of the largest specialist title and escrow companies in the US.

Please see details below of our trusted advisors & partners based in both the USA and UK.

USA UKChicago Housing Authority Product Advice

Chicago, USA Clive Wolman, Barrister at Law, Lincolns Inn

Lawyers Fields, London

McCarthy Duffy LLP and Squire Sanders (US) LLP Accountant

Accountants Baker Tilly, Chelmsford, Essex

Steinberg Associates, Chicago, USA Bank

Bank Metro Bank

BMO Harris Bank, Signature Bank Solicitors

Property Grant Dawe LLP, London & Squire Sanders

Goldtree Realty Inc, Chicago, USA (UK) LLP London

Property Management

Shorewood Properties

Title & Closing Agent

Chicago Title Company

About Us and Our Partners• To take advantage of the exceptional returns without the hassle of direct ownership.

• No worries about maintenance or refurbishment issues compared to direct ownership.

• No rental void periods compared to direct ownership.

• Fixed contractual interest either paid or compounded every 6 months dependent on your

choice of bond.

• Short to medium term. Returns and Redemption payments are concluded after 3 years.

• Asset backed investment.

• All bondholders have a first ranking fixed charge over the shares of CCP LLC, a wholly owned

subsidiary of CCG PLC that will own all properties purchased with proceeds of the bond issue.

• 85% rule. The amount of Bonds in circulation cannot exceed 85% of the value of the property

portfolio.

• Fixed return of 12% per annum.

• Fully SIPP/SSAS compliant structure.

• No need to register to pay US taxes for non US residents.

• No need to open a US company or bank account.

• Secure alternative investment involving one of the largest title insurance companies in the US.

• Property management, trading and development team in place with combined experience of over40 years.

• Interest and capital repayments paid in the original currency in which the bonds acquired are

denominated.

• Investment can be made in GBP, USD and EUR.

• Low entry levels of GBP 10,000, USD 10,000 or EUR 10,000.

Minimum Investment - Fixed Annual Returns £10,000 @ 12%

Yr1 Yr2 Yr3 Redemption@100% Total Annual Equivalent£1,200 £1,200 £1,200 £10,000 £13,600 12%

Why Should I Invest Now?

20 21

• Complete and sign the Bond Application form

• Enclose relevant Anti-Money Laundering documents, copies must be certified (2 forms of ID,

one showing your current address which must also be dated within the last 3 months and one

which must be a picture ID such as a current Passport or Driving Licence)

• Funds request will be sent with the payment details once anti-money laundering checks

are complete

• Bond Certificate issued

• First returns received 6 months from the end of the subscription date, unless the compound

bond is selected, in which case the annual interest payment is compounded each year and

paid in full upon redemption

Buying Process

First returns after

6 months

22 23