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Fantastically Asked Questions

What is Hedgehog?

A hedgehog is a cute spiky mammal that.... Oh wait, you mean us.

We are a blockchain-driven investing platform that makes investments in real-world assets available to eligible individual investors.

How does a Hedgehog investment work?

We partner with existing owners of real-world assets to create digital tokens representing fractional investments. This makes it possible for eligible individuals to invest alongside the existing owners, who continue to manage the asset.

When you buy these tokens in our app, you can earn a share of any rental income or profit generated when the asset is sold or re-financed.

What are the benefits of investing via Hedgehog?

We help people access investments in things like commercial real estate and renewable energy infrastructure, otherwise known as 'real assets'. These types of asset can generate income and often appreciate over time.

Real assets with intrinsic value can provide stability and reassurance during stock market volatility while offering potential portfolio diversification benefits.

What is a token?

We use 'tokenisation' technology, underpinned by blockchain-based smart contracts, to offer digital tokens backed by income generated, directly or indirectly, by real-world assets. When investing via our platform, your token is a digital representation of your investment in a fund, such as a limited liability company or limited partnership, that pools money from investors in order to invest in the underlying asset. Instead of holding a paper certificate, you own a digital token.

What is the minimum investment amount?

Right now, it's from $1,000, depending on the asset.

What fees do I pay?

Hedgehog does not charge any up front fees to our investors. Instead of Hedgehog charging fees to our investors, the owners of the assets listed on our platform pay us for the services we provide. The owners of assets may also charge a fee in relation to amounts invested by Hedgehog investors (in respect of their management of such investment).

For investments that appreciate in value over time, Hedgehog charges a fee on any profit gained once the asset has been sold or re-financed. Terms and conditions are outlined in each offering document.

How do I get access to investments?

To access to our investments, register here and start investing once your eligibility is confirmed.

Why use tokenization?

Hedgehog uses ‘tokenization’ technology, underpinned by blockchain-based smart contracts, to offer digital tokens that are backed by income generated, directly or indirectly, by real-world assets. The technology helps Hedgehog remove barriers to entry and enables eligible individuals to have more control over the investments they own. Technology helps Hedgehog make it more accessible and efficient for people to invest through digital and automatic investment processes. Hedgehog envisages an exciting future, and tokenization is the first step in giving investors access to liquidity, which would otherwise not have been available for these asset classes.

How do I earn returns on my investment?

Returns on investments in real assets typically come from appreciation and/or income. Asset values can go up due to factors associated with location, development or improvements. The asset itself can also generate income, for example rent from commercial or residential use.

Who is managing the assets on the ground day-to-day?

We partner with asset owners to offer investment opportunities where your money is invested alongside the team managing the asset - it helps ensure a better alignment of interests.

How will I receive updates about my investments?

You can access information on your assets 24/7 from the Portfolio section of the app. We'll also send you notifications when there's important information to share, such as an income distribution.

Is Hedgehog regulated?

Hedgehog Invest Limited (FN 961050) is an Appointed Representative of MJ Hudson Advisers Limited which is authorised and regulated by the Financial Conduct Authority (FN: 692447).

What currency will I be paid in?

We currently pay out in USD via wire transfer.

What happens after I make my investment?

When we receive your payment, the status of your order in your portfolio will change from ‘Pending’ to ‘Issuing tokens’. When the investment round closes, it'll change to ‘issued’. The money received through the issuance of tokens will then be used by the token issuer to enter into the underlying investment.

When do I get my token?

Our token issuance service provider issues all tokens together at the end of an investment round. Some rounds can be 90 days, but can sell out faster. So, if you're one of the first investors, you'll wait longer than the slow coach snapping up the final token. Details regarding the token issuance service provider, as well as other service providers, are set out in the offering documents for each token.

Where are my tokens held after I invest?

Tokens are initially issued to a digital wallet provided by a third party custodian chosen by Hedgehog. Investors can continue to use that wallet or transfer their tokens from this wallet to another digital wallet that is registered to them.

Who manages the properties?

Hedgehog creates opportunities for eligible individuals to invest in assets that continue to be managed by their existing owners.

Does Hedgehog provide tax advice?

Hedgehog Tokens are exposed to US real estate. This means there are additional tax issues compared to a standard investment. We’ve prepared some general information of the possible tax issues affecting US and non-US taxpayers.  A more detailed summary of the tax matters which may affect Tokens is contained in the token documentation.

These FAQs are provided for informational purposes only, and are not intended to provide, and should not be relied on for, tax, legal or other financial advice.  If you have any questions, or require investment or other advice, please contact your legal, financial or other professional advisors.

What are the tax implications? (US)

Tax status

We expect that the Token Issuer will be treated as a partnership, and each Token Holder should be treated as a partner for US federal income tax purposes in each applicable series of the Token Issuer.

Tax Reporting

Token Holders who are US taxpayers will receive a Schedule K-1 for the Tokens. Token Holders may also receive reporting regarding state and local taxes.

Distributions

Generally, a partner in a partnership must take into account its share of the partnership’s taxable income or loss in determining its own taxable income or loss for US federal income tax purposes. State and local filing and tax obligations may also apply.

Do I need to provide any tax forms in connection with an investment?

Yes; US taxpayers must provide Hedgehog with an IRS Form W-9, which indicates your status as a US taxpayer. We’ll ask you to complete this form when purchasing a token. As well, Hedgehog, as a regulated company in the financial services industry, must ask customers to provide information on their tax residency when investing. We’re required to ask each investor to self-certify the following information:

  1. Name
  2. Date of Birth
  3. Residential Address
  4. Tax residencies: The jurisdiction of tax residencies.
  5. Taxpayer Identification Number (TIN) for each tax residency.

Please note that we may be obliged to share this information with the relevant tax authorities.

What are the tax implications? (non-US)

Do I need to file a US tax return?

No; Token Holders who are non-US taxpayers should not have to file any US tax returns or otherwise be subject to any US tax reporting obligations solely as result of investing in Tokens exposed to US real estate.

Distributions

Any distribution to a non-US Token Holder will be subject to a 30% withholding tax, which rate may be reduced if the Token Holder is eligible for the benefits of a tax treaty with the US or, in respect of interest payments, qualifies for an exemption from withholding.

Subject to the Tokens achieving the desired tax treatment (as described in the token documentation), non-US Token holders will not be subject to withholding taxes on any capital gains realized in connection with an investment in Tokens.  

Do I need to provide any tax information or forms in connection with an investment in Tokens?

Yes, you will need to provide an IRS Form W-8, which indicates your status as a non-US taxpayer. We will ask you to complete this form when purchasing a Token. As well, Hedgehog, as a regulated company in the financial services industry, must ask customers to provide information on their tax residency when investing. We’re required to ask each investor to self-certify the following information:

  1. Name
  2. Date of Birth
  3. Residential Address
  4. Tax residencies: The jurisdiction of tax residencies.
  5. Taxpayer Identification Number (TIN) for each tax residency.

Please note that we may be obliged to share this information with relevant tax authorities.

Don't see your question here? Get in touch.

What does it all mean?

Accredited investor
A sophisticated investor with professional knowledge of and/or experience in a single or multiple asset class. Qualifying investors typically have to meet minimum income/net worth requirements and/or belong to certain professional groups
Alternative investment
An investment in an asset outside of the three traditional asset classes; stocks, bonds or cash
Asset
Anything owned that holds current, future or potential monetary benefit
Blockchain
A shared, distributed digital ledger that records the provenance of a digital asset
Brownfield investment
Brownfield is an urban planning term, which refers to land that has been used previously and has been lying vacant/unused. Brownfield investments are those where this land is either fully repurposed towards a new projects or the existing asset is repaired.
Capital Gain
The profit earned on the sale of an asset
Capital Gains Tax
A tax incurred on the profit made from selling an asset
Capitalisation rate (cap rate)
A real estate metric calculated using a property's net operating income as a percentage of its value. The lower the cap rate, the more expensive a property is deemed
Commercial real estate (CRE)
A non-residential property that is used for commercial profit-making purposes such as an office space
Diversification
A risk management strategy that limits the exposure to a single asset by investing in a range of assets/asset types with the intention that positive performance in one asset type can offset the negative performance of another
Greenfield investments
Greenfield is an urban planning term, which refers to land that has not been used before and remains in its original form e.g. a forest or a field. A greenfield project is built from scratch on this land.
Impact Investing
Investing with the intention of reaping measurable positive social and/or environmental return alongside a financial return
Internal Rate of Return (IRR)
IRR is used to determine the profitability of an investment by calculating the year-on-year expected growth in value of an investment
Investment Portfolio
A collection of asset classes that an investor holds, such as stocks and bonds
Liquid Asset
An asset that can quickly and easily be exchanged into cash while keeping its market value stable
Net Operating Income (NOI)
A property’s operating expenses subtracted from its gross operating income
Occupancy Rate
The ratio of occupied and/or rented space to the total amount of space available to be leased. This percentage is used to estimate anticipated cash flow with regards to real estate and in particular, commercial or industrial property
Passive Income
Income that continues to be earned even after the initial work on an investment is completed
Portfolio Diversification
Investment within multiple asset classes that combine to reduce an investor's overall risk profile
REIT
An abbreviation of ‘Real Estate Investment Trust’. A REIT is most commonly a listed company that invests in property or property loans.
Real-world assets
An investment asset class that covers investments in physical assets such as real estate, energy and infrastructure
Renewable Energy Infrastructure
Infrastructure that is used to generate the production of electricity or heat or both, from renewable sources such as solar, wind or water
Rental yield
The annual return that is achieved from renting out a property, as a percentage of the total value of the property
Security Token
The digital representation of a direct or indirect investment that is stored on a Blockchain ledger
Smart Contract
Similar to a traditional contract, a smart contract is an automatable and enforceable agreement, written digitally and stored on the blockchain
Stock Market Volatility
A measure of how much the stock market's overall value fluctuates
Tokenization
A process of issuing a Security Token on a Blockchain that digitally represents investment in an asset in the physical world
WAULT
An abbreviation of weighted average unexpired lease term used to describe the average remaining lease length on a property or a portfolio of properties

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