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To be fair I don't think LCF are the worst company out there. I don't think they are outright scammers and they are at least FCA registered which is more than all the pop up foreign companies are.I spoke to them on the blower, was told they secure they loans against property and assets exceeding the loan value and only a doomsday scenario would see the investors lose out.
However I am suspicious of their asset cover. They quote figures on their web site such as this "Currently we hold £685.3 million assets protecting £215 million in loans" which they say is correct as at 31 Aug 18 but we have to take their word for it since they are using a loophole to delay publishing their accounts.
Their web site does contain more explicit warnings than many other sites which is good, though some people still seem to have arrived at the site through intermediaries when looking for a fixed term savings account.
I don't think Feefo should allow reviews of high risk unregulated financial products without FSCS cover as users giving high stars to products they don't understand on the basis of little more than how easy it was to hand over their money is misleading. Seeing reviewers say things like "i shall probably 'unload' a pension to them for the next two/three years" makes me very concerned and despair how many people are not fit to manage the recent pension freedoms they have been granted.And then I went to the FeeFoo reviews
I have a high risk VCT, but as well as a good track record they list all the companies they are lending out to and their progress in regular reports. I hope for all your sakes the impenetrable lending strategies of LCF pay off and their asset cover has been correctly priced.0 -
To be fair I don't think LCF are the worst company out there. I don't think they are outright scammers and they are at least FCA registered which is more than all the pop up foreign companies are.
Although only since June 2016 (bear in mind the start date of this thread) and permitted to conduct corporate finance business only.
You can get FCA registration by sending in two tokens off the back of a cereal packet.
There is no such thing as an outright scammer. Every scammer will go to the grave insisting they had a genuine investment scheme that didn't work out, and they told everyone not to risk more money than they could afford to lose. Most of them will genuinely believe it. Humans can believe anything they want to.Holeydel wrote:I spoke to them on the blower, was told they secure they loans against property and assets exceeding the loan value and only a doomsday scenario would see the investors lose out.
Investors in Secured Energy Bonds and Providence Bonds were told the same thing. They lost 100% of their money.0 -
Reaper, could you post the name of the VCT company you are investing with so I can call them about their due diligence re the listing of corporate names of borrowers. Something which LC&F and other commercial lenders will not do, at least not without a legally enforceable nondisclosure agreement. Do they list publicly or only privately to investors.0
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bail-in, when doing your research did you dig up anything on Oracle Ltd? That's the Maltese company that seems to be the last link in the chain (they own Global Security Trustees Ltd, who in turn have fixed and floating charges over all LC&F's assets) and they seem to have come into being just to take over ownership from he who the MSE forum team don't allow us to name.0
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verybigchris wrote: »bail-in, when doing your research did you dig up anything on Oracle Ltd? .
Interesting name there. I wonder if they are infringing trademarks of Oracle corporation but equally it makes a very difficult name to google as most searches will reference the US company. I wonder if that is a deliberate choice of name.
If a company has charges over all of LCF's assets then can they truthfully claim that all their loans are asset backed if the assets are owned by a separate company?verybigchris wrote: »(they own Global Security Trustees Ltd, who in turn have fixed and floating charges over all LC&F's assets) and they seemed to have come into being just to take over ownership from he who the MSE forum team don't allow us to name.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I suspect you don't mean HMRC. :-)Currently, in the application of the bail in rule, there is little chance of a run on a failing bank and depositors recovering their money. One good reason why savers have been moving money from banks to NS&I where the BRRD and tool kit bail in rule do not apply and deposits are 100% protected by HMRC. Yay!
Curious what proportion of the UK savings market does NS&I now have (last 21 months or so since the 1/1/17 rule changes to which you refer) compared to what it had in the recent past and longer history, as a result of all these savers moving their money to it? Presumably you're implying the rule changes (the details of which are not really known about by the public) led to a statistically significant spike in NS&I share of the market?
Seems doubtful; it's much more likely that if NS&I have attracted new business it relates to product availability, competitive rates etc rather than to fears of FSCS coverage failing to protect the advertised limits in a bail-in situation.
I think the practical point is that to all intents and purposes if your money is with a bank or other instutution qualifying for £85k FSCS depositary protection on your money and you keep your deposit below that level, you will be fine, because the government is not going to apply the full extent of its powers to deliberately 'unprotect' the small savers to the benefit of the bank's other creditors or shareholders.No bank can now honestly say savers' deposits are 100% safe. Firstly, savers could lose them anyway if the bank goes bankrupt and is liquidated, which the government would try anything to stop, and secondly could also lose the value of confiscated deposits above the £85,000 protected value in the bail in rule. Thirdly, if the PRA cannot cover the bank's or banks' debts with the value of the confiscated shares and deposits, as depositors have no legal contract with the FSCS, the PRA as executive arm of the BofE and applying the BRRD with every legislative statutory backdoor (exceptions to the rule) could in theory simply call the FSCS and tell them to remove the protected failing bank deposits from protected status giving the PRA access to those protected deposits to further pay off the failing bank's or banks' outstanding debts. From a practical financial and political perspective it could be argued it would be the best approach by the powers that be. However, it is doubtful long suffering low interest savings depositors would agree and they would probably not vote for that political party again! Of course, the government could fall back on bail out again, but that defeats the whole purpose of the implementation of the BRRD and the tool kit.
The above is not in the ruling government interest politically, but it is a possible scenario if more than one systemically important bank is failing. Of course the government would raise taxes and could borrow it's way out but just think what interest rate the lenders may charge under such dire circumstances. On second thoughts, do not think about it! �� Printing more money, as Venizuala has found, has its own problems and could trigger hyperinflation and devaluation of the pound.
Possibly the most useful line of your post was: "On second thoughts, do not think about it!", which could be applied to much of what you wrote. The average man on the street with his less-than-£85k per covered institution, does not need to worry that "depositors have no legal contract with the FSCS", because - in practice - what if they did have a legal contract? A contract can still be broken by an entity that doesn't want to follow it and prefers to do what it wants, causing disaster for the person who got screwed over. As mere small retail savings customers we just have to suck it up - and assume the FSCS won't screw us over of its own volition, and neither will the government step in and tell the FSCS to screw us over. Generally, FSCS is very valuable cover.
Which you don't get with an unregulated mini-bond where you could lose 100% of your money. By contrast with an FSCS-covered savings account you would generally stand to lose 0% of your money. That's the context of FSCS being mentioned in this thread.
Just get the latest annual report of any VCT you fancy. They will show the companies in whom they invest their money for debt or equity and the nature of the financial instruments they hold (and cost / fair value of their investments).Reaper, could you post the name of the VCT company you are investing with so I can call them about their due diligence re the listing of corporate names of borrowers. Something which LC&F and other commercial lenders will not do, at least not without a legally enforceable nondisclosure agreement.
VCTs are listed on the stock exchange so their reports are available to all, for free. You can get them from their websites.Do they list publicly or only privately to investors.0 -
I'm not sure how far that line of questioning will get you but I have an investment with Proven. As bowlhead says the reports are freely available. Here's the latest one which you will see lists every company they have invested in, how much they are currently worth and so on.Reaper, could you post the name of the VCT company you are investing with so I can call them about their due diligence re the listing of corporate names of borrowers. Something which LC&F and other commercial lenders will not do, at least not without a legally enforceable nondisclosure agreement. Do they list publicly or only privately to investors.
http://www.provenvcts.co.uk/siteuploads/literaturedocs/170870_PVCT_Report_Accounts-As_Printed.pdf0 -
Interesting name there. I wonder if they are infringing trademarks of Oracle corporation but equally it makes a very difficult name to google as most searches will reference the US company. I wonder if that is a deliberate choice of name.
If a company has charges over all of LCF's assets then can they truthfully claim that all their loans are asset backed if the assets are owned by a separate company?
Oracle Health Ltd owned by LC&F CEO and not long ago delisted. After, Oracle sole owned by same was formed through a company in Malta that has a reputation for registering foreign companies for tax reasons. Search on the Global Security Trustees corporate trustee listing, the new director of which is {text removed by MSE Forum Team}, Oracle Limited document post, the sole owner and director of which is {text removed by MSE Forum Team}, for details. Not much else to learn though.
The registered charge re LC&F relates to the assets owned by LC&F, mostly mortgaged. The registered charges on the assets of the 400 or so corporate borrowers are registered on each of the corporate borrowers company listings at Companies House. That is why I and others re due diligence have requested corporate names from the LC&F loan book. The registration of the charges on the assets of the corporate borrowers at Companies House will confirm the existence of the LC&F commercial business loans, and thereby the commercial lending business.
LCF could give the names of the corporate borrowers if they wanted to. With stock market listed VCTs the legal regulations require disclosure of the company invested in, or borrowing money. With the unregulated LC&F minibond there are no such obligatory requirements.
I understand the mini-bond is going to be listed on the Malta stockmarket. LC&F have made one commercial loan of a £million in the UK. I wonder who that went to. Perhaps Oracle if what happened re the only loan in that year in Accounts Return 2014-15 is anything to go by. See London Capital and Finance Mini-bond Review in this thread or the auditing accountant's ({text removed by MSE Forum Team}) commercial risk note on the lodged accounts at Companies House for that year.0 -
bowlhead99 wrote: »The average man on the street with his less-than-£85k per covered institution, does not need to worry that "depositors have no legal contract with the FSCS", because - in practice - what if they did have a legal contract? A contract can still be broken by an entity that doesn't want to follow it and prefers to do what it wants, causing disaster for the person who got screwed over. As mere small retail savings customers we just have to suck it up - and assume the FSCS won't screw us over of its own volition, and neither will the government step in and tell the FSCS to screw us over.
You are right. A party to a contract can break it with impunity, often with few consequences, but a government parliamentary body breaking the contract as in if bank depositors had a deposit insurance contract with the FSCS. That is a different matter altogether. There would be no shortage of claims companies taking on board depositors in class action suits against the FSCS and perhaps it's creator, the BofE. Could be the biggest class action suit in financial history! ��☺0
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