Astute Capital hit by FCA warning, still being promoted on Facebook

Astute Capital logo

The Financial Conduct Authority has posted a warning about Astute Capital, whose bonds were reviewed here in March 2019. A search for Astute Capital on the FCA register now brings up:

This is an unauthorised firm that may be providing financial services or products in the UK without our permission. If you deal with unauthorised firms you will have less protection if things go wrong.

along with details of what to do if investors think they have been scammed.

What to do if you think you’ve been scammed?

It can be easy to fall for a scam – the people that run them are skilled at persuading their targets to part with money. If you think you have been contacted about a scam or have paid money to fraudsters there are steps you can take to protect yourself.

Exactly what regulated financial services the FCA think Astute Capital is carrying out is currently unclear. Astute Capital’s main business is commercial lending, which does not require authorisation for the FCA. Astute Capital has raised money from investors via bonds listed on the Euronext, Vienna and Frankfurt Stock Exchanges. That does not require authorisation from the FCA either.

I was unable to find a current trading price for Astute Capital bonds on any of these exchanges, suggesting the bonds remain illiquid.

In 2019 Astute Capital promoted its bonds directly to the public via Google ads.

Astute Capital Google ad

That did require authoristion from the FCA – and as Astute didn’t have that itself, it would have needed a third party to sign off the ads (Section 21 authorisation). But that was back in 2019 so it seems unlikely that it has anything to do with the FCA’s warning. But it took them 5 years to issue a warning against Asset Life plc so who knows.

In interim accounts for 2019, Astute Capital stated that it had terminated all relationships with unregulated introducers.

Yeah, totally can’t read that at all.

Despite this, Astute Capital is being promoted on Facebook by a third party unregulated introducer called “IPB”, in bizarre ads which sort-of but-don’t-really-at-all obscure Astute’s name.

Who is behind IPB is unclear as no ownership details are provided on its Facebook page. Similarly unclear is why IPB are promoting Astute after they claimed to have stopped taking money via introducers.

Astute Capital funds are on-lent to Astute Capital Advisors Limited, which recently published accounts for March 2020, showing it to be £6.9 million in the red with a loss of £3.5 million. The company stated that it believed the company was nonetheless a going concern and attributed its losses to the young age of the company.

In Astute Capital plc’s accounts, the directors stated that they expect ACA to generate returns of at least 30% per year, plus profit shares.

The average forecasted returns for ACA on its loan book is circa 30% per annum, plus profit shares structured by way of minimum earning written in the loan documents and should be taken into consideration when assessing ACA alongside interest earnings.

As of March 2020 Astute Capital plc had taken in £20.2 million of investor money, according to its published accounts.

Astute Capital previously stated that it was hoping to obtain FCA registration in 2020. Instead all the company has managed to obtain from the FCA is a public warning.

Astute Capital ditches unregulated introducers; lending arm overdue with accounts

Astute Capital logo

Astute Capital has filed interim accounts for the half-year ending September 2019.

As at September 2019 the company was on the edge of solvency with £6,000 in net liabilities.

According to director Richard Symonds, in April 2019 the company closed operations in Leeds and terminated all relationships with unregulated introducers. By this point of course the company had already raised £15 million.

Compliance support consultant Thistle Initiatives were hired to ensure Astute Capital “remained fully compliant throughout the entire investor marketing and on-boarding process”.

Whether Thistle had anything to say about Astute Capital’s risk-warning-deprived Google ads direct to investors is not known.

google advert

Nor is it known whether Thistle had any say in Astute’s marketing strategy of scrubbing the Internet of posts critical of the company, which we know from the evidence it left took place between June 2019 and November 2019 (when I noticed it).

Astute has provided the FCA and other unspecified third parties with “due diligence packs” prepared by Thistle, and apparently intends to consider becoming FCA regulated in 2020. Good luck to them with that.

Astute has been hit by the collapse of Reyker Securities, which acted as custodian for a large number of Astute investors. No investor funds are missing as a result of Reyker’s failure according to Astute’s director.

Investor funds are on-lent to Astute Capital Advisors. At time of writing ACA is nearly a month overdue with its accounts.

Astute Capital publishes accounts, scrubs critical posts from Internet

Astute Capital logo

Astute Capital plc, which issues bonds listed on the Irish Stock Exchange paying up to 8.9% per year, has filed its accounts for the year ending March 2019.

The accounts were filed two months late, leading to Astute’s bonds being temporarily suspended from the Irish Stock Exchange.

In the year to March 2019, Astute Capital made a marginal loss (£2k) and finished with net liabilities of £82k. The directors assume the company will continue to operate on a going concern basis.

Astute Capital plc on-lends investors’ money to another company, Astute Capital Advisors, which in turn lends to “the UK property and SME markets” and pays 12.5% per year back to Astute Capital plc. As at March 2019, £15.7 million had been lent to ACA.

ACA’s only previous accounts were filed using small company exemptions and were unaudited. Due to being a private rather than public limited company, ACA still has another two months to file its March 2019 accounts.

Whether Astute continues to keep the performance of the company which conducts the actual lending activities under wraps with fileted accounts will become clear when the ACA accounts are filed.

Astute Capital plc advertised its bonds via Google as “up to 8.9% Fixed Return, Easy Online Process” with no risk warnings.

google advert

Astute has been scrubbing material critical of the company and warning retail investors of the high-risk nature of its bonds from consumer forums.

A MoneySavingExpert forum thread “astute capital safe?” was started on 1 Feb 2019 by a first-time poster, who asked simply “Is astute capital a safe place to invest in an ISA?”

The initial responses to their query have since been deleted. The first response to their query, dated a month and a half later, from another first-time poster, now starts “I think so, there are fund managers in place and FCA trustees too…” (neither of which is relevant to the fact that Astute Capital’s bonds, like any loan to a small company, have an inherent risk of 100% loss and cannot be described as “safe”).

The second response from “eskbanker” retorts “And here we go, new shillsposters joining to make a solitary contribution in support of an operation that everyone else is running a mile from because of the risks highlighted in the above posts!” 

This post makes clear that multiple posts highlighting the risks of Astute Capital’s bonds have been deleted between eskbanker’s post and the present day.

As does one a few posts below, which confirms that a total of five posts have been deleted from the thread between 16 June 2019 and the present day.


MoneySavingExpert has refused to comment on why the posts were deleted. Nevertheless the only plausible reason why multiple posts from various users highlighting the risks of Astute Capital’s bonds would all be deleted is that Astute Capital complained about them.

Why Astute Capital feels the need to get posts highlighting the risks of its high-risk bonds scrubbed from consumer forums is not clear.

And in case anyone’s wondering: no I haven’t. Not a dicky bird.

Company providing ISA wrappers to unregulated bonds collapses; LCF administrator appointed

Asset manager Reyker Securities has been placed into special administration.

Reyker was mostly known as a stockbroker and Discretionary Fund Manager, but part of its business involved approving promotional literature and providing an ISA wrapper to two investments reviewed here: Blueprint Bond and Astute Capital.

Both Blueprint and Astute Capital remain in business and should in theory be largely unaffected by Reyker’s collapse, as the ISA status of investors’ funds should remain valid despite the administration.

They will however be unable to raise further money via Reyker ISAs.

Reyker Securities ran out of money after a failed attempt to sell the business, plus unspecified “legal actions being faced by the company” and the downturn in the structured product market.

Smith and Williamson have been appointed as administrators, who are also currently overseeing the collapse of London Capital & Finance, Park First and Krono Partners.

We review Astute Capital’s stocks & shares ISA bonds paying up to 8.9% per year

Astute Capital logo

Astute Capital is offering bonds paying up to 8.9% simple interest as follows:

  • Access – 3.2% over a 1 year term
  • Income – 7.5% per year income paid out bi-annually
  • Balance – 7.64% per year interest (on a compounded basis) rolled up and paid out after 3 years
  • Growth – 7.64% per year interest (on a compounded basis) rolled up and paid out after 5 years

The website incorrectly states that the Balance and Growth bonds offer 8.24% and 8.9% interest respectively. This is on an annual simple interest basis, which is irrelevant as the interest is only paid out at the end of the 3/5 year term. The correct basis is compound interest.

It is not clear why investors would want to invest in the five year bonds when they pay the same compounded interest rate as the three year bonds, but the three year bonds pay out earlier.

The bonds are listed on the Irish stock exchange, but investors need to be aware that they will only be able to sell them on the exchange if there are willing buyers at that time.

Who are Astute Invest?

No details of who is behind the business are provided by Astute’s website. A “Meet The Team” page is accessible via Google, but it is orphaned (there are no links to it on Astute’s main website), out of date and contains only placeholder images of the directors, suggesting it is not intended to be live.

Astute Capital plc was incorporated in October 2016 by Alistair Moncrieff and Timothy Smith. Smith resigned as a director in November 2018. Moncrieff resigned a week ago on 26 February 2019. Alistair Moncrieff was described in the most recent Companies House accounts as Chairman and co-founder.

Prior to co-founding Astute Capital, Alistair Moncrieff was director and owner of Life and General Limited (formerly BCP Admin Limited) which ran an insurance comparison website, Beprotected went into liquidation in November 2017, owing just over £1 million to creditors. A recent update from the liquidator states that any recovery is highly unlikely.

Astute Capital plc has declared to Companies House that there is no identifiable person with significant control over the company, which is highly unusual.

A statement submitted to Companies House in November 2018 states that the company’s share capital is owned by D&A Nominees, which is a nominee company owned by Druces LLP, a firm of lawyers.

The remaining directors of Astute Capital registered with Companies House at time of writing are Richard Anthony Symonds and Adrian Francis Bloomfield.

Astute says grandly on its “About Us” page that “Astute Capital Plc raises money through its £500 million publicly listed bond program that has been approved by the Central Bank of Ireland.” The £500 million figure is rather irrelevant as Astute has not raised anything close to that amount. Its accounts for March 2018 disclosed that it had raised a total of £8 million via its bonds as at September 2018. (This comprises £1.1 million up to the balance sheet date of March 2018 and £6.9 million post-balance sheet as at the date the accounts were filed.)

How safe is the investment?

Astute Capital is promoted by Google ads which describe its investments as “Fixed Return, Easy Online Process.” No capital-at-risk warnings are provided in the advert.

google advert

Astute Capital is also promoted via Facebook ads from a Facebook page entitled “Savings Explained”, which ironically fails to explain that Astute Capital’s products are investments and not savings products.

It is important that investors understand that these are loans to a small company and if Astute Capital is unable to make sufficient returns by lending out its investors’ money, or for any other reason runs out of money to service its bonds, investors risk losing up to 100% of their money.

In its accounts made up to 31 March 2018, Astute Capital states that money loaned to it by borrowers will be loaned onward to TAR Asset Management Limited at 9% per year. TAR is “an alternative finance provider to challenger banks in the secured lending space”. TAR has subsequently been renamed to Astute Capital Advisors Limited. It is wholly owned by Richard Symonds, the sole director.

These March 2018 accounts state that at the time of the accounts, it had not had the opportunity to start advancing loans to TAR.

However, the accounts do state that the company was owed £1,082,000 by Brunswick Court Limited (formerly Astute Investment Management Limited), “a special purpose vehicle to carry on select property development projects”.

This is contradicted by the March 2018 accounts of Brunswick Court Limited itself, made up to the exact same date as Astute Capital plc’s, which show nothing on the balance sheet but an £84 debt. Brunwsick Court Limited is wholly owned by Timothy Smith (Astute Capital’s co-founder), who is also sole director.

Asset backed investment

Astute states that when it lends investors’ money to a company, it takes security over that company’s assets which is worth more than the money it lends.

Investors should bear in mind that it is not enough for Astute to get its money back by selling the security in the event its borrowers default. It needs its borrowers to pay Astute sufficient interest to allow it to consistently pay up to 8.9% a year (simple interest basis) to its investors, while meeting its costs.

Secured lending is not risk-free as there is also the risk that if the underlying borrower defaults, the security cannot be sold for enough to cover the loan.

Investors in asset-backed loans have been known to lose 100% of their money 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 Astute Capital, only illustrating the risk that is inherent in any loan note even when it is asset-backed.

If investors plan to rely on this security, it is essential that they hire professional due diligence specialists to confirm that in the event of a default, the assets of Astute Capital and its borrowers would be valuable and liquid enough to compensate all investors.

Should I invest in Astute Capital?

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 individual loan note in a new startup, 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 yields of up to 8.9% a year (on a simple interest basis) should be considered very high risk. As an individual, illiquid security with a risk of total and permanent loss, Astute Capital’s loan notes are much 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 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?

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 is sufficient for the risks involved in lending to a new startup company.

Their due diligence advisers will need to start by sorting out the discrepancy between the accounts of Astute Capital plc and its sister companies, Astute Capital Adviser Limited (formerly TAR Asset Management) and Brunswick Capital Limited (formerly Astute Investment Management Limited).

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