SIPP investment in Property

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  • edited 2 May 2018 at 11:05PM
    atushatush Forumite
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    edited 2 May 2018 at 11:05PM
    Malthusian wrote: »
    No, if this is a scam (your word, not mine) it's merely an averagely well run one. Madoff's scam lasted over a decade. MMM Global is still going 7 years after launch, albeit after repeated collapses and relaunches. Scams last until new investment dries up. There is no time limit on that.

    Note that I have no reason to believe Dolphin is a scam - I'm only addressing your implication that it can't be a scam because scams have to collapse within three years.

    The vast majority of companies obtain their credit lines from regulated institutions in such a way that no retail investor is exposed to the risk of total and permanent loss. What makes Dolphin different that it needs to source funds directly from retail investors?

    So did investors in Secured Energy Bonds and Providence Bonds. Google them.

    You're using the word "no risk" in reference to this investment, an ultra-high-risk unregulated bond with a risk of total loss, and you claim others are ignorant about how it works?

    Why? What information will that add? Interest payments being made on time means nothing. Let's assume your particular bond pays 12% - that means so far you have given them say £100,000 and they've given you £36,000 back.

    What is the value of the bond on the open market? How much would you get for your investment if you decided to redeem it today? Only after we add this figure to the money in your pocket can we assess how well the investment has performed to date.

    Why are you so keen for others to invest new funds into this scheme?

    i agree. Sounds like a scam.

    WE'll all find out soon enough. But I doubt you (or the above poster) have skin in the game
  • MalthusianMalthusian Forumite
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    Not that anyone gives one, but Im going to Berlin next month at their expense in one of the regular inspection trips.Maybe I'll glean something useful.

    And if the scheme collapses you can add the cost of the trip to the amount of your capital you got out before it did :D

    I have absolutely no doubt that you will be shown some very nice buildings which Dolphin Trust genuinely own.

    However the existence of buildings is not useful information to anyone who is invested.

    If you want to glean something useful then ask them to supply the last five years' independently audited accounts and their current funding position, and see how they react.

    I strongly doubt that you will glean anything useful by asking, it's the reaction that will be the useful bit.
  • I have already found out that the building which my funds were used to buy ( obviously with others) is subject to an agreed sale to a South East Asian institutional investor.

    I will ask about accounts for sure, as well as the level of funding which was in excess of £30m three years ago when I invested.

    I get the distinct feeling that some here will not be satisfied even if I eventually get my capital returned with all the contractual interest.
  • MalthusianMalthusian Forumite
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    I get the distinct feeling that some here will not be satisfied even if I eventually get my capital returned with all the contractual interest.

    Nope.

    An investment scheme which generated zero net revenue and paid interest of 12% per annum, simply by paying off existing investors with new investors' money, would take 11 years to collapse if inflows remained constant.

    A scheme paying 12% per annum would therefore need to be at least 11 years old before we can say with confidence that it is generating sufficient external revenue to sustain interest payments of 12% per annum. (I know Dolphin Trust has paid different amounts to different investors but 12% seems to be in the ballpark.) Until it reaches this age, the fact that investors are being paid in full means absolutely nothing. Dolphin Trust is only 5 years old.

    Obviously I'm not saying that any investment scheme paying 12% per annum which is less than 11 years old must be a Ponzi scheme; however, until it is at least 11 years old, the fact that it is making contractual payments doesn't prove it isn't.

    Of course, an investment scheme doesn't have to reach this age to prove it's legitimate - the other thing that would prove its legitimacy would be full management accounts, independently audited by a reputable firm of accountants, proving that interest of 12% per annum is being paid from rental payments or investment profits.
  • Dolphin Trust Gmbh is listed in the German version of Companies House..... I haven't checked any accounts as yet but all documents seem to be up to date.
  • MalthusianMalthusian Forumite
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    As far as I can see Dolphin Trust's last filed accounts are for the year ending December 2014. I'm not au fait with German company law and that may well be "up to date", but if so, by English standards German company law is very relaxed indeed.

    There is little point analysing the details of accounts that are so old they may as well be in Gothic script.


    The accounts I was referring to are not the published annual accounts but the management accounts, the spreadsheets showing rental payments and investment profits coming in and bondholder interest and capital going out on a monthly basis. Every company has these. In the days when I used to work in due diligence for corporate lending and venture capital, these are what we would look at to determine that it was a sound investment.
  • Hello I got to this thread after looking at a link on another thread on this forum after a search about The High Street Group and High Street Boutique Finance. It appears they are linked to Dolphin. Firstly, I want to thank Lozzy1965 for all his questions and endeavours because he had exactly the same ones that I had. I also want to thank all contributors particularly Malthusian, Atush, dunstonh because I have spent hours researching these types and similar investments and it is difficult to get unbiased views. My concerns are much the same as Lozzy1965 in that, amongst many other investments, I have seen one from High Street Boutique Finance that offers 18% over 18 months for a 25k investment in a loan note. Apparently this is secured by a Corporate Guarantee.

    In fact this is what it says in its literature

    "The High Street Group is one of the UK’s most successful privately owned businesses and a leading financial and property group and they operate multiple companies in property development and construction, hospitality and leisure, offering expertise and opportunities across multiple sectors. High Street Boutique Finance is one the companies of the group (The HSG) offering unique opportunities to exclusive Investors. They focus on raising funds to enable our internal development and construction departments to build distinctive residential and commercial properties.

    The High Street Group has expanded rapidly with unparalleled growth, now employing more than 100 people in the Head Office in Newcastle upon Tyne and across development sites in the UK. Reported profits for 2016 were £26 million.

    The Group have projects valuing in excess of £260 million and focusing on PRS schemes, traditional development, rooftop extensions and the leisure and hospitality sector. With their sister group, they have prestigious projects in the North of England and Scotland. They currently have close to 200 residential properties under construction, all designed and built to an extremely high standard. They have a further 1,800 units in planning and project management."

    Now I am a very new investor and, to me, this sounds pretty good.

    My questions are, are your opinions still the same as they were when the OP posted 5 years ago? Has anything happened to change your perception or should I stay well away from this?

    Also are your views the same for "hands off rental income schemes" such as pbsa's, serviced holiday accommodation etc as I am also looking at some of these which you buy a unit and then receive a guaranteed rental income of anything from 8% to 12% for anything from 2 years to 10 years. Or would each one have to be considered on its individual merit?
  • zagfleszagfles Forumite
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    Why do you think any company is willing to pay you 8% or 18% for use of your money? Why? High street banks are offering personal loans with representative APRs around 3%. That's what the average Joe Bloggs will pay for an unsecured loan.

    So why do you think these companies can't get a bank loan for a similar rate, if their business model is sound and their guarantees are so good? Why? Just think about it.

    The only reason a bank would charge them more than the average Joe Bloggs is because banks see them as a higher risk. That's how lending works. It's the same with corporate bonds. The higher the interest rate, the higher the risk.

    This post sums it up quite well (different scheme, same principle).

    https://forums.moneysavingexpert.com/showthread.php?p=67765646
  • Well the guy selling this to me said that these sort of companies dont lend from banks for 2 reasons. 1. The loans take months to organise with the banks and 2. The banks always want some of the equity of the finished development so this along with the higher interest rates that the bank charges for these types of loans means the company ends up paying pretty much the same. Thats what he said
  • OldMusicGuyOldMusicGuy Forumite
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    Now I am a very new investor and, to me, this sounds pretty good.
    So, as a new investor, do you wish to invest in investments that "may expose me to a significant risk of losing all of the money or other property invested"? Because that is what the home page of High Street Boutique Finance says.

    These are unregulated, unprotected investments for high net worth investors that are prepared to lose everything. Why do you think it sounds "pretty good"?
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