This section should be read together with the full Risk Factors section contained in each relevant Information Memorandum.
Prospective investors should carefully consider the following risk factors before making any decision to invest. The risks described below are not exhaustive, and there may be other risks that are not currently known or which are not considered material at this time. If any of these risks occur, they could materially affect the ability of the relevant company to pay interest, repay capital, or meet its obligations under the Loan Notes.
Investment in the products featured on this website involves a high degree of risk. You should not invest unless you are prepared to lose some or all of the money you invest. These investments are only intended for investors who understand the risks of unregulated, illiquid and non-readily realisable investments.
Capital at Risk
Your capital is at risk. There is no guarantee that you will receive interest payments, that interest will be paid on time, or that your original capital will be repaid in full. The companies offering the Loan Notes may experience trading, operational, market, funding or financial difficulties which could result in investors losing part or all of their investment.
Unregulated Investment
The Loan Notes featured on this website are not regulated products. The companies offering the Loan Notes are not authorised or regulated by the Financial Conduct Authority in respect of these investments. As a result, investors are unlikely to have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service if something goes wrong.
Illiquidity and No Secondary Market
The Loan Notes are not listed or traded on any recognised investment exchange. There is no established secondary market for them. This means investors should expect to hold their investment until maturity and may not be able to sell, transfer, or realise their Loan Notes early. In some cases, early redemption may not be available at all, or may only be available at the discretion of the issuing company.
Security Does Not Guarantee Repayment
Some of the Loan Notes may be described as secured, for example by way of a debenture, fixed and floating charge, or security trustee arrangement. However, security does not guarantee repayment of capital or interest. If the issuing company defaults, the value of the secured assets may be insufficient to repay investors in full. The assets may also be difficult to value, difficult to sell, or subject to claims from other creditors.
In certain cases, senior lenders, banks or other secured creditors may rank ahead of Loan Noteholders. Where prior-ranking security exists, those creditors would be repaid before Loan Noteholders, which could reduce or eliminate the amount available to repay investors.
Business Performance Risk
The ability to pay interest and repay capital depends on the commercial success of the relevant company and its underlying business activities. There is no guarantee that projected revenues, margins, property values, commodity trades, development profits, refinancing options, sales or other business assumptions will be achieved.
Past performance, previous completed projects, historic returns, or previous interest payments should not be treated as a guide to future performance.
Property Development Risk
For property-backed opportunities, returns may depend on the successful acquisition, development, letting, refinancing or sale of property assets. Property development can be affected by planning issues, construction delays, cost overruns, contractor failure, changes in property values, market demand, interest rates, lending conditions, valuation risk and delays in achieving sales or lettings.
If the company cannot source suitable properties, complete developments on budget, refinance on acceptable terms, or sell or let properties as expected, it may not be able to meet its obligations to investors.
Precious Metals, Gemstones and Trading Risk
For gold, gemstone or precious metals opportunities, returns may depend on the company’s ability to source, verify, transport, refine, store and sell physical assets. Although trading models may seek to reduce exposure to commodity price movements, the business may still be affected by supply chain disruption, counterparty failure, logistics issues, assay or certification delays, currency fluctuations, regulatory changes, market conditions, theft, fraud, insurance limitations or reduced demand.
If the company is unable to secure suitable supply, complete trades, maintain margins, or access buyers on the expected terms, this could affect its ability to pay interest and repay capital.
Valuation Risk
Property, commodities, gemstones, jewellery, gold, company assets and other secured assets may be difficult to value accurately. Valuations may be based on assumptions, forecasts, third-party opinions or market conditions at a particular point in time. Actual sale values may be materially lower than expected, particularly in a default, insolvency or forced-sale situation.
Funding and Refinancing Risk
Some investment models may rely on future funding, refinancing, senior lending, asset sales or continued capital raising. There is no guarantee that such funding or refinancing will be available when required, or on commercially acceptable terms. If further finance is not available, the company may be unable to complete projects, continue trading, pay interest, or repay investors at maturity.
Operational Risk
The companies may be exposed to operational risks including management error, failure of internal systems, project delays, inadequate controls, supplier issues, contractor failure, staff capacity issues, increased costs, legal disputes, compliance failures, or unforeseen events. Any of these could adversely affect the company’s performance and its ability to meet investor payments.
Key Personnel Risk
The success of the companies may depend heavily on the experience, relationships and performance of key directors, senior management, staff, contractors and commercial partners. The loss of key personnel, or the inability to attract and retain suitable people, could have a material adverse effect on the business.
Market and Economic Risk
Changes in wider economic conditions could affect the performance of the investments. Relevant factors may include interest rates, inflation, property market conditions, commodity prices, exchange rates, construction costs, consumer demand, credit availability, geopolitical events and changes in investor appetite.
Inflation may also reduce the real value of fixed interest payments over time.
Regulatory, Legal and Tax Risk
Changes in law, regulation, tax treatment, planning policy, property rules, financial promotion rules, commodity trading rules, import/export requirements or other legal requirements may adversely affect the companies and their ability to generate returns.
Tax treatment depends on individual circumstances and may change in the future. Investors should seek their own tax advice before investing.
Forward-Looking Statements
Any forecasts, projections, target returns, expected exit routes, estimated valuations, business plans or statements about future performance are forward-looking and based on assumptions. Actual results may differ materially from those projected or expected. Investors should not place undue reliance on forward-looking statements.
No Investment Advice
Nothing on this website should be treated as investment, legal, tax or financial advice. The information is provided for general information only. Prospective investors should read the relevant Information Memorandum in full and seek advice from an appropriately authorised financial adviser before making any investment decision.
