Aston Darby offers unregulated investments in airport car parking spaces which promise a “guaranteed yield” of 11% in years 1 and 2, a “projected yield” of 11% in years 3 and 4 and a “projected yield” of 12% in years 5 and 6.

Status

Open to new investment.

Who are Aston Darby?

Aston Darby was incorporated on 10 March 2017. The website lists the directors as Leigh Heywood (CEO) and Rod Bailey (Director and Head of Carpark Operations). While their job titles would imply that Heywood is the head of the company, Aston Darby Group Limited is in fact 100% owned by Roderick Bailey. Due to its young age, Aston Darby Group Limited is yet to file accounts.

How secure is the investment?

These are unregulated investments and you risk losing up to 100% of your money if you cannot find a buyer when you come to sell your investment.

There is an inherent risk when an investment whose yield is variable (how much you can rent out your car parking space for, times the fraction of time the car parking space is occupied for) is attached to a “guaranteed” return.

If investors are relying on a promise by Aston Darby that they will make up any shortfall between the yield of their parking space and 11% in the first two years, they need to be confident that Aston Darby is not simply paying their own money back to them.

It is not difficult to take £25,000 from someone and pay them £2,750 a year later, and £2,750 a year after that. The question is how much they will receive when the 2-year “guaranteed yield” period is over, both in terms of continued rent (which, notwithstanding Aston Darby’s projections, is dependent on how often the space is occupied and how much people are prepared to pay for parking) and how much their investment can be sold for.

The value of your investment will depend on how much a car parking space can be sold for on the open market. Investors need to ask themselves: why would another investor buy a parking space on the secondary market, with no guaranteed yield, when they can get a parking space directly from Aston Darby offering an 11% guaranteed yield?

If car parking spaces are yielding 11% in the current economic climate, then it will not take long for competition to enter the market. What happens if the yield that can be reaped from car parking spaces drops below 11%, and what happens to the value of the car parking space in that case?

Some of Aston Darby’s car parking spaces are owned by Aston Darby itself (at minimum, those it is advertising to new investors). Investors therefore need to assure themselves that Aston Darby will not fill up its own parking spaces before it fills up those which belong to investors.

While the investment is a tangible asset, a space in the middle of a car park is only useful for parking cars in. The value of the investment is therefore inextricably linked to Aston Darby’s business and in the event of the failure of the car parking business, the value of the investment as a piece of land is likely to be near-worthless. Investors need therefore to consider the possibility of up to 100% loss.

Should I invest with Aston Darby?

As with any unregulated investment, 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 single-asset investment offering 11% per annum yields should be considered very high risk (i.e. higher risk than a diversified portfolio of stockmarket funds), contrary to Aston Darby’s literature which twice describes this investment as “low risk”.

Before investing investors should ask themselves:

• How would I feel if in year 3 the income dropped dramatically and I could not realise my investment for anything close to what I paid for it?
• How much is the investment likely to be worth once the two-year “guaranteed yield” period ends?
• Do I have a sufficiently large portfolio that the loss of most or all of my investment would not damage me financially?

If you are looking for a “guaranteed” investment, you should not invest in unregulated products with a risk of 100% capital loss.

Empire Property Concepts offers three unregulated loan notes:

• A 2 year fixed rate secured loan note which will accrue 10% compound interest in the first year and 12% compound interest in the second year. Interest is compounded annually and payable at the end of the term with a 4% bonus (equating to 4% of the capital invested) together with the capital invested.
• A 2 year fixed rate secured loan note which will accrue 10% simple interest in the first year and 12% simple interest in the second year. Interest is payable every 6 months in arrears.
• A 4 year fixed rate secured loan note which will accrue 15% simple interest in the first year, 15% simple interest in the second year, 15% simple interest in the third year and 15% simple interest in the fourth year. Interest is payable at the end of the term together with the capital invested. (So in other words 60% interest paid after four years, which is equivalent to 12.5% per annum on a Compound Annual Growth Rate basis.

The investment opportunity is not openly promoted on EPC’s website, but I was able to easily obtain details of the opportunity from an unregulated introducer after self-certifying as a sophisticated investor (without being asked to provide any evidence).

Status

Open to new investment.

Who are Empire Property Concepts?

Paul Rothwell is the founder and director of the business. The other director is Jeffrey Taylor. Companies House shows that there is a single voting “A” share in Empire Property Concepts which is owned by Paul Rothwell – which means that Paul Rothwell has full control over the company.

Empire Property Concepts was incorporated in 2009, but the business seems to have taken off in 2015 when current assets leapt from £175k to just over £1 million (according to the December 2015 and December 2014 accounts).

Tangible assets according to the December 2016 accounts are just over £11k, so Paul Rothwell’s £33m property empire (The Telegraph) is presumably held in his own name or in the name of special purpose vehicles – other companies owned by him and associates.

How secure is the investment?

These investments are unregulated corporate loans and if Empire Property Concepts defaults you risk losing 100% of your money.

Investors’ money is secured against the underlying property by a First Legal Charge. However, before placing any reliance on this security, it is essential that investors undertake professional due diligence to ensure that in the event of a default, that their charge against the security is propertly recorded, and that the asset can be sold to raise sufficient money to compensate investors, as any other corporate lender would.

This is particularly important given that the company offering the loan (Empire Property Concepts) does not appear to own the underlying investment properties.

Should I invest with Empire Property Concepts?

As with any unregulated 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 12.5% per annum yields should be considered high risk (i.e. higher risk than a diversified portfolio of stockmarket funds).

This particular bond is described as asset-backed. Before putting any reliance on the security backing the bond, investors should undertake professional due diligence to ensure that a) the security exists b) in the event of default, the security could be easily sold and would raise enough money to cover all investors’ money c) the charge over the security has been properly and legally recorded.

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 that the loss of 100% of my investment would not damage me financially?
• Have I conducted due diligence to ensure the asset-backed security can be relied on?

If you are looking for “security”, you should not invest in unregulated products with a risk of 100% capital loss.

Westway Holdings offers unregulated fixed-interest bonds paying 7.5%pa over a five year term.

Curiously, the return is 7.5%pa if interest is paid out to the investor annually, but only 7.34%pa if interest is rolled up and paid out at the end of the five years. The roll-up version is described as a “5 Year deferred income plan” and pays out 37.5% (7.5 x 5) plus a 5% bonus, for a total of 42.5%. A 42.5% return after five years is equivalent to 7.34% per annum compounded. This means that investors receive a lower return if they roll up interest, despite the use of the word “bonus”.

The statement in Westway’s brochure that their bonds pay “up to 8.5% annual return” is inaccurate. A bond which pays 42.5% at the end of five years does not pay a 8.5% annual return, the annual return is 7.34%. The use of compound annual return rather than simple interest is near-universal in the finance industry.

Status

Open to new investment.

Who are Westway Holdings?

Westway Holdings was incorporated on 3 September 2015.

Westway’s Holdings’ “About Us” page contains full details of the directors, who are Antony Marks (Director & CFO) and Richard Birch (Director of Operations).

Despite Marks being described as “CFO” (in a traditional corporate hierarchy, this means Chief Financial Officer, the second highest post next to the Chief Executive Officer), Companies House shows that he owns 80% of Westway Holdings and this, combined with his director bio being listed first, suggests that he is the head of Westway Holdings.

How secure is the investment?

These investments are unregulated corporate loans and if Westway Holdings defaults you risk losing 100% of your money.

Westway states that investors’ money is invested in Supported Housing for tenants such as people with disabilities, ex-offenders and substance abusers. Its income comes from the Government but investors should not confuse this with their investment being backed by the government. If the rent paid by the Government / other tenants is insufficient to pay investors a 7.5% return, investors may lose their money.

Westway makes clear on its website and brochure that the investment is not covered by the Financial Services Compensation Scheme.

Bonds are secured against the assets of the company, with an independent trustee (More Group UK) appointed to monitor asset values to ensure that Westway’s debt does not exceed 90% of the value of their assets, and take control of the assets in the event that Westway defaults.

Before placing any reliance on the security backing the bond, investors need to assure themselves that in the event that Westway defaulted, the Security Trustee would be able to sell the assets for enough money to compensate investors. While the assets are revalued bi-annually by independent valuers, investors need to bear in mind that Westway’s assets (Supported Housing properties) are designed to be occupied by vulnerable tenants and cannot be sold as easily as a property occupied by private tenants who can simply be given notice. The market for such properties is likely to be restricted.

Should I invest with Westway?

As with any unregulated 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.

This particular bond is described as asset-backed. Before putting any reliance on the security backing the bond, investors should undertake professional due diligence to ensure that a) the security exists b) in the event of default, the security could be easily sold and would raise enough money to cover all investors’ money c) the charge over the security has been properly and legally recorded.

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 that the loss of 100% of my investment would not damage me financially?
• Have I conducted due diligence to ensure the asset-backed security can be relied on?

If you are looking for “security”, you should not invest in unregulated products with a risk of 100% capital loss.