London capital and finance need some advise

Matt2016

hi i invested a lot of money into a 3 year bond with them and i have heard that the FCA are investigating them and in addition theFCA has imposed certain requirements them including it may not (without prior consent from the FCA) deal in anyway its assets including the money held in its bank accounts and must cease conducting regulated activity.
my bond has another 15 months to go so i called and got an answer machine stating you are unable to withdraw your funds.

Does anyone have any advise on if i have lost this investment or is there anything i can do to get my money?

Alexland

Shame you didn't ask or search on these forums before investing to hear all our regular high risk warnings on this company.

FCA are finally taking the LC&F problems seriously so just sit tight to discover if there is any money left.

See recent posts on the main thread:

https://forums.moneysavingexpert.com/discussion/5346049/london-capital-and-finance

Alex

Malthusian

At this stage it is too early to say whether any money has been lost.

However, this is an ultra high risk unregulated bond and losses up to 100% were always a possibility, as with any investment into a small startup company.

Did you invest via an FCA-regulated adviser or a SIPP? (Probably not, but worth checking.)

Beware of anyone who contacts you claiming they can get your money back. You are at high risk of being targeted by recovery fraud.

dunstonh

i invested a lot of money into a 3 year bond with them

As you invested in them, this would suggest you knew that it was an illiquid, very high-risk investment with a 100% loss potential and no FSCS protection? (although I suspect not and you really thought it was a fixed term deposit).

i have heard that the FCA are investigating them and in addition theFCA has imposed certain requirements them including it may not (without prior consent from the FCA) deal in anyway its assets including the money held in its bank accounts and must cease conducting regulated activity.

The loan note you bought is not a retail financial services product. It should never be marketed to consumers. Yet it is was. That is why the FCA have taken action (and as usual, many years after the rest of us knew about it). You can place most retail investments on a 1-10 risk scale. What you bought was off the scale at around 15.

my bond has another 15 months to go so i called and got an answer machine stating you are unable to withdraw your funds.

That is correct. It is not an investment you can withdraw from and it is not a tradeable asset.

Does anyone have any advise on if i have lost this investment or is there anything i can do to get my money?

Too early to say. These types of loan notes have a high failure rate with virtually total loss possible. However, some do manage to pay redemptions.

You only get FSCS protection if you bought via a financial adviser and the advice was found to be unsuitable. However, its unlikely most financial advisers would go near this very high risk, illiquid, unregulated investment. Most, if not all, were bought without advice. So, no FSCS protection applies in that case.

jimjames

Matt2016 wrote: »

my bond has another 15 months to go so i called and got an answer machine stating you are unable to withdraw your funds.

Does anyone have any advise on if i have lost this investment or is there anything i can do to get my money?

I'm sure you're probably quite worried about the situation if you've posted here. I'm also assuming that you didn't realise the risk you were taking with this investment. Out of interest, what did you think you were investing in?

My understanding is that the terms you signed up to don't allow for early repayment so you've got 15 months before there is a potential problem with access to your money which means unfortunately there isn't much you can do before then.

There is another thread that may give you some more background on the company
https://forums.moneysavingexpert.com/discussion/5346049/london-capital-and-finance

Matt2016

thanks for all of your advise it looks like i just need to sit it out. i will read through the links you have attached.

dont_use_vistaprint

Other than advertising P2P loans as savings products , what are the FCA actually investigating ? From what I can gather there is nothing to suggest anyone has or will lose any money - unless someone here knows differently ? I'm not endorsing them in any way, but my understanding is all the loans were being paid and are secured against property and assets, the main issue I had when speaking to them was no diversification, they wanted to put all my money in a single loan to a mid sized manufacturer, but it was very clear to me it was high risk p2p with no guarantees.

dunstonh wrote: »

Too early to say. These types of loan notes have a high failure rate with virtually total loss possible. However, some do manage to pay redemptions.

Can you back that up ? point to some LCF or similar loans that have failed ? My experience is to date they haven't failed, but would be interested in some stats if I'm wrong

Malthusian wrote: »

However, this is an ultra high risk unregulated bond and losses up to 100% were always a possibility, as with any investment into a small startup company.

Lets stick to facts, LCF do not loan money to start ups, only well established medium and mid sized UK companies

Twopints

dont_use_vistaprint wrote: »

Lets stick to facts, LCF do not loan money to start ups, only well established medium and mid sized UK companies

OK, in the interest of sticking to facts, can you provide details of these loans and the companies they have been made to?

dont_use_vistaprint

Twopints wrote: »

OK, in the interest of sticking to facts, can you provide details of these loans and the companies they have been made to?

You would need to ask them, I'm sure the client list is confidential , but the markets they operate in is public info

Malthusian

dont_use_vistaprint wrote: »

Other than advertising P2P loans as savings products , what are the FCA actually investigating ? From what I can gather there is nothing to suggest anyone has or will lose any money - unless someone here knows differently ?

London & Capital Finance has for the past three years issued ultra high risk unregulated investments suitable only for sophisticated and HNW investors. Despite this, it has consistently misleadingly promoted its loan notes to unsophisticated investors via third-party websites which imply that they have equal status to FSCS-protected deposits.

Its last accounts from April 2017 disclosed that it was barely solvent. It has failed to file accounts for 2018.

The FCA are now investigating and have frozen their bank accounts.

Other than that, nothing suggests anyone has or will lose any money.

I'm not endorsing them in any way

I absolutely love a bit of devil's advocacy but there's a fine line between devil's advocacy and defending the indefensible. Personally I only advocate for the devil when he's an immortal fallen angel with a massive pitchfork, not an obscure outfit issuing shonky unregulated investments that's just been shut down by the FCA.

but my understanding is all the loans were being paid and are secured against property and assets

The same was true of numerous other unregulated minibonds, up until the point they collapsed with total losses to investors.

the main issue I had when speaking to them was no diversification, they wanted to put all my money in a single loan to a mid sized manufacturer, but it was very clear to me it was high risk p2p with no guarantees.

The reviews left on feefo by other London Capital & Finance investors suggest you are in a minority if you understood it was high risk P2P.

Lets stick to facts, LCF do not loan money to start ups, only well established medium and mid sized UK companies

I am not talking about the underlying loans. LCF investors are not lending to them. They are lending to LCF.

Fact: LCF is an unlisted firm with a few hundred thousand in net assets, as disclosed in its last moth-eaten accounts.

Fact: The very smallest firm on the FTSE AIM (the UK small companies index) is around 150 million in size.

Fact: LCF is effectively three years old, as it began trading in its present business model three years ago in 2015, after an existing company was taken over and renamed.

Fact: LCF is a tiny tiny micro-cap startup. Its loan notes have an inherently high risk of default, like any other loan note issued by a tiny tiny micro cap startup.

Any more facts needed or unregulated investment endgame cliches you want me to smack around the ring?

masonic

dont_use_vistaprint wrote: »

Other than advertising P2P loans as savings products...

As Malthusian points out above, this was not P2P in the sense you think. This was P2LCF as that's who investors were lending their money to.

Assuming they actually had a legitimate loan business, investors will still become unsecured creditors of LCF if it goes into administration and will therefore be towards the back of the queue when it comes to realising any remaining assets. This is a stark contrast to P2P in which lenders are a party to the underlying loan contracts and have trust claims.

Can you back that up ? point to some LCF or similar loans that have failed ? My experience is to date they haven't failed, but would be interested in some stats if I'm wrong

dunstonh was speaking in general terms. Some examples of similar loans that have failed are those issued by Provident Financial, CBD Energy and Square Pie.

Lets stick to facts, LCF do not loan money to start ups, only well established medium and mid sized UK companies

Do you have any evidence that LCF has made any such loans? Because others have investigated and cannot find evidence of where investor money has gone.

If you know the name of any of the companies LCF to which claims to have made a secured loan, then you can verify this by checking Companies House for the presence of a legal charge.

dont_use_vistaprint wrote: »

You would need to ask them, I'm sure the client list is confidential , but the markets they operate in is public info

Correction, they have made unsubstantiated claims about operating in certain markets, but are unwilling to provide specific details.