Tyram Lakes (via Rothgen Capital) – we review their unregulated bonds paying 8% per year

Tyram Lakes logo

Rothgen is offering unregulated bonds paying 8% a year to raise funds for the Tyram Lakes eco lodge.

The bonds are currently being advertised via TV adverts on the Sky Property channel.

Note that while the Rothgen group of companies includes an FCA-regulated company authorised to provide advice (Connected Financial Services Ltd which trades as Rothgen Capital), the investment itself is unregulated, being a corporate loan note issued by Rothgen Management Limited (an unregulated company).

According to Rothgen, “Rothgen Capital Ltd is the sole exclusive marketing agent for the Tyram Lakes Bond and approaches by other companies should not be entertained. Please inform us if you are approached by any third party that is purporting to promote the Bond.”

In 2017 Tyram Lakes bonds were being promoted to investors by Century 21. Century 21 is still listed as a “Key Development Partner” in the literature (under “Real Estate/Property Marketing & Promotional Services), so it is slightly odd that Rothgen says investors should no longer entertain approaches from them in such strong terms.

Who is Tyram Lakes?

The issuer of this bond is Rothgen Management Limited. The company was incorporated in April 2014 and in its latest accounts (May 2017) reported net assets of £1.1 million. These accounts were unaudited and did not include a profit and loss account due to Rothgen’s small size.

Alkush Choudhury is the 100% owner of Rothgen Management. She is described as an “executive director” on the Tyram Lakes website. The other directors listed on Companies House are Daulton Byfield (Managing Director) and Mike Smith (Director).

The Tyram Lakes website lists Alexander Pearce as Chief Executive Officer, but oddly given his position, he is not listed as a director on Companies House.

Another oddity of Tyram Lakes’ management structure is that the terms “Chief Executive Officer” and “Managing Director” usually refer to the same person, the person running the company. It is therefore not clear who is actually the Number One at the company: CEO (but non-director) Alexander Pearce, Managing Director Daulton Byfield or Executive Director and 100% shareholder Alkush Choudhury.

How safe is the investment?

This is an unregulated corporate loan and if Rothgen Management Limited defaults on your loan you risk losing up to 100% of your money.

Investors’ money will be used to build eco lodges followed by a hotel in the Doncaster area. The strategy for repaying investors is not specified in the literature, but it presumably involves selling the development on completion or raising further money from investors.

If Rothgen Management Limited fails to complete the project or raise enough money from it to repay investors, there is a risk that they may default on payment of interest and capital to investors.

This particular bond is described as asset-backed. Investors have a fixed and floating charge against the assets of Rothgen Management Limited.

Investors should note that this does not include the land on which the eco-lodge is to be built. The brochure reveals on page 26 that the landowner of Tyram Lakes is Rothgen Limited, a separate company. Rothgen Management Limited (the bond issuer) has a 21-year lease agreement with Rothgen Limited, the landowner. A 21-year lease over land is worth considerably less than the freehold on the land itself.

Rothgen Management Limited aims to raise £25 million from investors. The current net book value of Rothgen Management Limited’s assets, according to the brochure and its accounts with Companies House, is £2,050,000.

This illustrates that it is essential that if investors plan to rely on this security, they should undertake professional due diligence to ensure that in the event of a default, Rothgen Management Limited’s assets would be sufficient to meet all creditors’ claims, including those of the administrator.

Investors in asset-backed loans have been known to lose 100% of their money (e.g. Providence Bonds and Secured Energy Bonds) when it turned out that there were not enough assets left to pay investors after paying the insolvency administrator (who always stands first in the queue).

We are not in any sense implying that the same will happen to investors in Rothgen Management and Tyram Lakes, only illustrating the risk that is inherent in any loan note even when it is a secured loan.

The investment literature contains a whole page devoted to the low interest rate environment in the UK and the low interest rates offered by cash ISAs and other savings accounts. This is a totally irrelevant comparison because this is a capital-at-risk investment.

No high net worth or sophisticated investor would compare the returns from corporate lending to the returns on FSCS-protected cash accounts – they would compare it with the returns on offer from other capital-at-risk investments such as regulated diversified stockmarket funds. It is disappointing that companies offering unregulated bonds continue to include misleading comparisons such as this in their literature.

Should I invest in Tyram Lakes / Rothgen Management?

This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.

As with any corporate bond, this investment is only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio and are prepared to risk 100% loss of their money.

Any investment offering interest of 8% a year should be considered high risk. As an individual, illiquid security with a risk of total and permanent loss, the Tyram Lakes bond is higher risk than a mainstream diversified stockmarket fund.

Before investing investors should ask themselves:

  • How would I feel if the investment defaulted and I lost 100% of my money?
  • Do I have a sufficiently large portfolio of diversified investments that the loss of 100% of my investment in Tyram Lakes would not damage me financially?
  • Have I conducted due diligence to ensure the asset-backed security can be relied on?

The investment may be suitable for high net worth and sophisticated investors who will already be well aware of all of the above risks, are looking to invest a small part of their assets in corporate lending, have done sufficient due diligence, and feel that the return on offer (8% over three years) is sufficient for the risks involved in lending to a small company.

If you are looking for a secure investment, you should not invest in corporate loans with a risk of 100% loss.

27 thoughts on “Tyram Lakes (via Rothgen Capital) – we review their unregulated bonds paying 8% per year

  1. My bond was supposed to be redeemed on the 2nd December 2019 according to the agreement. I was told that as my cheque was not banked until towards the end of December 2016 my bond would not be redeemed until the corresponding date in December 2019. Apart from an email received on the 21st December and verbal confirmation the bond would be redeemed I have heard nothing and it is now the 2nd January. My cheque was dated the 20th December 2016.

  2. My bond was supposed to be redeemed on 9th Dec 2019. I was told it would take 30 days. God knows why as my last interest payment was 1st Dec 2019. I have completed redemption forms and have received confirmation they have been received. I still have not received my capital return and feel I just get messed about each time I phone them. They told me two weeks ago that my payment was imminent but obviously that was a lie.

  3. Further to my comments above I have now been informed that my investment will not be repaid until such times there are sufficient funds. In the meantime I will receive 0.001% per month which equates to £5, a far cry from the £100 quarterly interest I was receiving up 1st December last year.

  4. My telephone number is [removed due to risk of recovery fraud. -Brev]. I’ve been told this evening that a cheque is on the way and should be delivered by the 15th.

  5. Nigel – it’s a bad idea to post your telephone number. More firms are likely to call you on the assumption if you invested in this you will invest in their high risk, unregulated scheme too. Plus you may be approached by for Recovery Fraud – people who say they can get your money back for you if you just pay this small upfront fee (never to be seen again of course).

    Normally Brev blanks out personal details from posts but he/she seems to have missed this one.

  6. Following on from above post. I’ve been promised my money will be paid sometime in February. Fingers crossed they’re not lying again.

  7. I’ve been given 50% plus interest. They have assured me I will get the remainder at some point but cannot give me a date.

  8. Hi Richard I invested a very lot of money, would appreciate you contacting me.

  9. Hi Richard. My wife and I have also invested and the investments matured in March. We have completed redemption forms and have today sent letters to two Directors of Rothgen as we have not received our money back. It is very difficult to get information from Rothgen or Tyram Lakes and we would also like to persue the matter further as a group. This is based on advice from our Solicitor

  10. [Edited: Contact details removed due to risk of recovery fraud. – Brev]

    Please ring me

  11. All these DELETED posts gives me the impression they are getting Twitchy. Possibly touching a few nerve ends ….yes !!!. How many people are involved, and how much money one wonders.

  12. We have tried to contact both Tyram Lakes and Rothgen without success. Graham Arnott has been appointed as Security Trustee but he is impossible to contact. Our Solicitor has suggested that the best way to tackle this problem is by a group action but what we need is names and contact numbers to take it any further. Please help if you can.

  13. Unfortunatly you all had plenty of time for D/D . Brev gave you the “WARNING ,2 YEARS AGO”. But you ignored it . The old saying “A fool and his money are soon parted”, He does not get it wrong many times, all it takes is time for it to come to fruition. You have paid yourself untill you get initial investment back.!!! QED.

  14. I “Assume” all investors have received there Interest and Capital as per investment Terms, as no comment for several weeks……

  15. What are the feelings of people regarding the latest proposals from Novanica Asset Trustees whom do not seem to have had any trading since incorporation in 2015?

  16. Any news on Tyram Lakes Investment. Is the project moving forward or has it failed?

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