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Post by gbhadri on May 24, 2019 14:08:06 GMT
Hi First post on this forum and looking for feedback on this loan note investment in the UK. Can anyone please let me know what due diligence I should undertake and questions I should ask before investing in this? The returns look attractive (if completing the full 7 years) and this website explains more too - www.farrburycapital.com/Thanks in advance for any help provided. Best Goutham
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cwah
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Post by cwah on May 24, 2019 14:14:59 GMT
Here's what I saw: - company just incorporated this month: beta.companieshouse.gov.uk/company/11969636- no info about the loans - no info about the directors in the platform So a very new company with a complete lack of transparency on its business and the people behind it. How likely would you get your investment back if all basic diligence info are hidden? You better give me the money š¤£
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iRobot
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Post by iRobot on May 24, 2019 14:41:05 GMT
Here's what I saw: - company just incorporated this month: beta.companieshouse.gov.uk/company/11969636- no info about the loans - no info about the directors in the platform So a very new company with a complete lack of transparency on its business and the people behind it. What else could it be... Apart from being a <redacted by poster>?You better give me the money š¤£ You may wish to re-word or just plain retract that comment. (Although there's a line of thought that the only bad publicity is no publicity, so maybe they appreciate the 'chatter'.) Probably the same guy who's behind Surrenden Invest: incorporated 2015, up to date with CH Filings, but that's as far as I've looked.
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iRobot
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Post by iRobot on May 24, 2019 14:49:01 GMT
Hi First post on this forum and looking for feedback on this loan note investment in the UK. Can anyone please let me know what due diligence I should undertake and questions I should ask before investing in this? The returns look attractive (if completing the full 7 years) and this website explains more too - www.farrburycapital.com/Thanks in advance for any help provided. Best Goutham How / where did you hear about them? Think the first thing I would establish is whether Loan Note investments are a regulated activity and, if so, why aren't the company registered with the FCA (not currently on the register). (Also no ICO registration, but Surrenden are and if I'm right about the connection, it could be that the setting up of the Farrbury company and/or website is simply 'work in progress'.
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cwah
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Post by cwah on May 24, 2019 14:49:24 GMT
You may wish to re-word or just plain retract that comment. (Although there's a line of thought that the only bad publicity is no publicity, so maybe they appreciate the 'chatter'.) Probably the same guy who's behind Surrenden Invest: incorporated 2015, up to date with CH Filings, but that's as far as I've looked. Yes sorry, just updated
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Post by gbhadri on May 24, 2019 15:27:06 GMT
Thank you for all your responses so far. Adding more info to the discussion as per email exchanges with Farrbury Capital: Loan note brochure: farrburycapital.com/brochures/An_Introduction_to_Loan_notes.pdfHigh Street Group story: farrburycapital.com/brochures/High_street_group_story.pdfFarrbury Website: farrburycapital.com Here are some outline details about our loan note provider The High Street Group one of the fastest growing property firms in the UK and winner of the āBest Residential Developerā for Central Scotland, 2017. Set up in 2006 and currently valued at Ā£1.2 billion, the High Street Group have had great success with all projects brought to market and we are delighted to be able to continue in this nature with the Secured Loan Notes. Key Loan Note facts: Invest from Ā£25,000 (no maximum cap). 12% fixed annual return (bonuses available from the 2nd year). Flexible 1 ā 7 year investment period. All funds secured against significant unencumbered assets. Debenture and Corporate Guarantee held by an FCA regulated Security Trustee. No exit fees or hidden costs such as stamp duty, legal fees, service charge, ground rent and general maintenance. Exit option every 12 months. The money will be provided for acquisitions for the High Street Group - thehighstreetgroup.com/ - funds are used for multiple projects, this is yet another security in place as you are backed by all the assets values, not just one. All the assets are held under a debenture by the security trustee (Castle Trust (https://www.castletrust.co.uk/ )). The High Street Group are so large now with multiple sectors under the group umbrella that they are able to remain buoyant even in a softer market. They also have strong relationships with international institutional and fund buyers who purchase whole sites from their PRS (Private Renal Sector) portfolio. I have included a couple of recent examples for you below. The High Street Group currently have a PRS (Private Rental Sector) pipeline of Ā£1 billion, this is heavily backed and in many cases forward funded by multinational investment firms. In December 2018, Cording Real Estate Group purchased a 362 unit site from the High Street Group for Ā£40m (please see link - www.cordinggroup.com/en/news/article/id/110 ). Prior to that they have also sold a site for 139 homes to Grainer PLC for Ā£30.5m (please see link - bdaily.co.uk/articles/2017/08/01/grainger-plc-snaps-up-another-prs-asset-in-305m-deal ). These examples are just some of the many success stories the High Street Group are able to boast, with a variety of projects both currently under construction and in the pipeline, the future looks very bright indeed. To date, they have made every interest payment on time and returned all invested funds when requested. We are very particular with who we take on in this nature and have installed multiple securities for clients and created a very flexible and high yielding platform to operate from. GB: I understand this is their 2nd capital raise. The first one raised around 50M and was paid back to investors in full with interest. Not sure if an economic downturn will impact this but with the first charge, maybe? See attached deed too... 7 year loan note Security Trust Deed - 01.0....pdf (612.37 KB)
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cwah
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Post by cwah on May 24, 2019 17:21:15 GMT
I had a look and here's my view: - You are lending money to development loans. Even if you get first charge it doesn't mean anything because if a development is half way build it probably doesn't have much value. See all the defaulted development loans in the forum. So really, you need to trust the development to complete and sell. So you should look at how many have been completed so far and how many are still in progress? And see if the history of success is good enough? Still very speculative.
- You probably don't have first charge on assets, you have a debenture on the company assets. This is not the same thing because the one having the first charge are likely to be the banks who provided the mortgage.
- The Trustee Castle Trust Capital had in 2018 Ā£118M cash available for Ā£770M liability (check their company house group account), which is ok to cover some defaults from time to time...
- But they are expanding aggressively and while their operating profit is doubling YoY, their losses as well. So their net income (fees, commission, interest) does not cover their administrative expenses (salary, offices, etc) and impairment losses on loans to consumer.
So I'd say it's a high risk, high reward type of bond. The company needs additional funds to survive and cover its obligations (its earnings can't cover its administrations cost and defaulted loans/projects). As long as more funds are coming in and there are no crisis you should be fine.
Lendy also did load of big development loans and had aggressive growth. Maybe have a look at what happened there and see if you're happy to take the risk.
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Post by gbhadri on May 24, 2019 17:35:57 GMT
Great points, thanks cwah and others who have commented. Will check out Lendy as well
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ilmoro
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Post by ilmoro on May 24, 2019 17:41:31 GMT
You might want to take a look at Assets Capital. The guy behind this HSG has several loans on the platform AIUI. Some research on CH would be worthwhile, he's got a lot of companies.
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Post by davee39 on May 24, 2019 17:53:17 GMT
If you are a high net worth or sophisticated investor you should be paying for advice, not asking the random (but delightful) bunch of semi-eccentrics who post here. If you are not you should look at returns of 12% in year 1, and 22% in year 7, think about the chances of ever getting your capital returned and then run one or more miles. You have a better chance of getting a return from a lottery ticket. Note that this looks like a wordpress website, it would be quick and easy to develop and it looks very professional. That does NOT make it a good idea. You may need one of these www.arthurbeale.co.uk/acatalog/Staves--Poles-.html
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Nomad
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Post by Nomad on May 24, 2019 21:43:36 GMT
If you are a high net worth or sophisticated investor you should be paying for advice, not asking the random (but delightful) bunch of semi-eccentrics who post here. I am in the process of seeking advice, and I'm happy to pay for it on an hourly fee basis, but not by way of a hefty annual percentage. However, that option seems hard to find, and the last firm I contacted said - In light of recent determinations by the Financial Ombudsman Service, where advisers have been held responsible for investments made by clients without their knowledge, we will now only engage on an ongoing basis which includes regular review meetings and full consideration of all investments.
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bigfoot12
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Post by bigfoot12 on May 25, 2019 16:43:19 GMT
If you are a high net worth or sophisticated investor you should be paying for advice, not asking the random (but delightful) bunch of semi-eccentrics who post here. I am in the process of seeking advice, and I'm happy to pay for it on an hourly fee basis, but not by way of a hefty annual percentage. However, that option seems hard to find, and the last firm I contacted said - In light of recent determinations by the Financial Ombudsman Service, where advisers have been held responsible for investments made by clients without their knowledge, we will now only engage on an ongoing basis which includes regular review meetings and full consideration of all investments. Someone recommended Brooks Macdonald to me for pension advice, quite a few years ago. I thought that the person I met (for pension advice) was fantastic and he didn't charge for the initial meeting which was very useful by itself. I wouldn't be surprised that if you are interested in risky, esoteric or specialist tax wrapper products they might have a similar policy to make sure that such a product remains suitable for you throughout its life, but when I saw them advice for straightforward products didn't require lifelong indenture (you can probably cancel after a while .... but it is probably better not to sign up for a product that you aren't happy with). Expect hourly fees to be somewhere around Ā£250/hr +VAT.
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Post by Deleted on May 25, 2019 18:15:34 GMT
You should get away with 0.5% annually for the capital they manage. Clearly not in London but in the sticks it is very negotiable. They don't need to control all your capital. Work with them, show you are educated with clear simple objectives. It all helps reduce their costs.
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theeye
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Post by theeye on Nov 29, 2020 22:15:26 GMT
You might want to take a look at Assets Capital. The guy behind this HSG has several loans on the platform AIUI. Some research on CH would be worthwhile, he's got a lot of companies. Words from the wise. Google HSG (the full name) bond review. Frightening reading.
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