Too good to be true?

ikon66

First post

Came across this on a search

cautacapital (can't post a link as a newb

Offers up to 9% depending on amount invested for 10 years. Capital paid back after that period with no loss. Can withdraw after 3 years with no penalty as far as I can see??

Unless I've misread something somwhere

ColdIron

Search the forum for 'too good to be true', these things almost always are

alanq

It's offering a corporate bond. These do not have FSCS £85,000 protection. Higher interest rates imply higher risks. Whether or not you get all or any of your funds back will depend on the success of the investments the company makes.

This investment is only available to "high net worth" or "sophisticated" investors which are defined on its web site.

eskbanker

I'd suggest reading beyond the headlines and down to the foot of pages like http://www.cautacapital.com/cauta-capital-bond-issue/, where you'll find

This investment offering has not been approved by an ‘authorised person’ under Section 21 of the Financial Services and Markets Act 2000.To view the content, you must be either: (a) High Net Worth Individual or (b) Self-Certified Sophisticated Investor. If you do not meet these criteria, you must not take any further action.This website assumes you have a clear understanding of investments of this type and is provided to prospective investors to evaluate the investment being offered. Before you will be able to view the offering you must certify your investor status. Investments of this type carry significant risks and the capital you have invested will be at risks. This investment is not covered by the FSCS.

ikon66 wrote: »

Came across this on a search

P.S. Could you clarify what search brings this up in the results please?

karlie88

As above.

But also pay attention to their 'reviews':

https://uk.trustpilot.com/review/www.cautacapital.com?

8 highly positive reviews, all posted within 6 days. No reviews before and no reviews since. Says it all really...

ChesterDog

The answer:

Yes.

Linton

I havent found anything questionable about the company. It seems to be a small company that does what it says - lending money for property developments. The interest rates seem reasonable for higher risk lending. Google comes up with nothing to suggest that it is trying to sell dubious products to naive investors - there isnt any any advertising at all.

Whether its bonds are suitable for you is another question. Here is what Cauta's website says on its "Legal" page:

This investment offering has not been approved by an ‘authorised person’ under Section 21 of the Financial Services and Markets Act 2000.To view the content, you must be either: (a) High Net Worth Individual A high net worth individual is one who:

• Had, during the financial year immediately preceding the date of the certificate, an annual income of £100,000 or more.
• Held, throughout the same year, net assets of £250,000 or more excluding the residential home, a pension or the proceeds of life assurance contracts.

or (b) Self-Certified Sophisticated Investor A sophisticated investor is someone who meets at least one of the following criteria:

• Has been a member of a network or syndicate of business angels for at least the six months preceding the date of the certificate.
• Has made at least one investment in an unlisted company in the two years preceding that date.
• Has worked, in the two years preceding that date, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises.
• Has been, in the two years preceding that date, a director of a company with an annual turnover of at least £1 million.

. If you do not meet these criteria, you must not take any further action.This website assumes you have a clear understanding of investments of this type and is provided to prospective investors to evaluate the investment being offered. Before you will be able to view the offering you must certify your investor status.Investments of this type carry significant risks and the capital you have invested will be at risks. This investment is not covered by the FSCS.

This seems pretty clear. Do you meet the criteria?

Gambler101

Its 9% for a reason, the reason is its highly risky.

Only invest money you know longer like having, because that may well be the case.

jimjames

Linton wrote: »

I havent found anything questionable about the company.

The Trustpilot reviews would certainly look to be questionable

ikon66

As I said it did look too good, I got the info from their FAQ but didn't go into all of the small print. I'm sure it did say it was protected up to £85k

But thanks all for the replies

Cheers

Malthusian

Gambler101 wrote: »

Its 9% for a reason, the reason is its highly risky.

Royal Bank of Scotland bonds are 9% because they're risky. Bonds like these are always 8% or 9% because that's the point at which you attract the highest number of suckers.

Less than 8% and it's not attractive enough to tempt them out of the regulated arena (you're barely offering more than certain loss-leader deposits). More than 10% and they start thinking "too good to be true" in large numbers (not just the one or two we see on MSE). 8-9% is the sweet spot.

Unless it's a massive coincidence and storage pods, airport car parking and property bridging loans all happen to yield exactly 8 or 9% net of costs.

If they were sold on a regulated stock market like RBS bonds, they wouldn't trade at a 9% yield.