WINIM Adopts IPEX

A key challenge for property fund managers and their developmentpartners is that, even with best-practice financial checks and projectmonitoring processes, they have no way of confirming how much (if any)of each progress payment has been distributed to the subcontractors andsuppliers that formed part of the claim.

This ‘blind spot’ is of particular concern given widespread builder liquidityissues and the subsequent insolvency risk.

Industry-leading funds management and development firm WINIM hasturned to technology for a solution, adopting the IPEX payment platform to limit investor exposure to this risk.

Your funds fenced off

Peitra Creak, WINIM’s project director explains, “We’ve always placedgreat emphasis on scrutinising builder financials and checking claimsagainst work performed onsite but, traditionally, once you made a progresspayment to the builder, you’ve had zero visibility or control over howthose funds were deployed.
“You just had to accept the builders’ ‘stat dec’ at face value and make yournext payment.

“As soon as it became clear that IPEX could provide us with paymentoversight and even more importantly, remove the ability for a builder touse our funds to cashflow their other projects, we didn’t hesitate to adoptthe platform.”

Each progress payment made by WINIM is ring-fenced to that specificproject.
Builders can access their prelims/margin and direct costs but can’t accessthe balance of the funds (the portion claimed on behalf of subcontractorsand suppliers) for any reason other than to pay those linked to the claim.

See the money

WINIM is provided with high-level visibility on payments made from theproject account, allowing them to validate (or invalidate) the builders’statutory declaration each month.

“There’s essentially no change in process for us or our builder but the riskreduction is significant—we can now confirm that payments tosubcontractors and suppliers line up with the QS assessment. If someonelinked to the previous claim hasn’t been paid, it’s identified immediatelyand gets resolved before we approve the next claim.

In theory, IPEX limits our risk at any given time to a single progresspayment, but it’s even more secure than that. Whilst paymenttransparency alone tends to promote good behaviour, it’s the systemguardrails to prevent movement of funds into other projects that is the realgame changer.

Even if our builder was to run into cashflow trouble or enteradministration, subcontractor payment status is always clear and current,providing a clear line in the sand regarding cost to complete.”

WINIM’s use of IPEX not only helps to confirm that they’re partnering withfinancially sound builders, payment protection is also helping to attract the best subcontractors, supporting delivery of premium products.

“Acceptance of IPEX proves that our builder partners are confident in theirown cashflow position, demonstrating that they have no intent on usingprogress payments to cashflow other developments. Their use of IPEX alsohelps us to create a healthier payment model for the contractor; the factthat supplier payments are controlled and visible to us means they canoften claim deposit monies earlier.

We have multiple projects commencing in 2025 that will be built underIPEX. We really see this commitment from our contractors as essential toproviding us and our investors with the level of comfort required to enterinto a build contract.”

Skills magnet

It was also clear that protecting subcontractor payments helped to attractthe best trades to WINIM projects and WINIM sites were being prioritisedover others where getting paid might sometimes be an issue, Creak said.

“We believe that initiatives like the adoption of IPEX and our rollout ofLatent Defects Insurance will help us to exceed customer expectations andcreate spaces they’ll love to live in.

“Of course, we’re also applying what we’ve learnt through this process tothe benefit of our advisory clients. Whether it’s our project or not, we’recommitted to removing unnecessary risks and achieving the best possibleoutcome for all involved.

We see the adoption of IPEX as an important industry change, one thatprovides benefit to all stakeholders, from developers, subcontractors,financiers, the contractor and, ultimately, purchasers.”

IPEX combines legal protections with practical controls to ‘ring-fence’funds to a specific project. IPEX shields projects from unforeseen buildercashflow issues, reducing the risk and impact of builder insolvency. For more information, contact IPEX