Asset Life plc offers unregulated fixed-interest bonds paying 8.75%pa for a three year term.
[Update 15 May 2019] Closed to new investment. The company is subject to a warning by the FCA.
Who are Asset Life plc?
There is no information on the website as to who is behind the business.
Companies House shows that the directors are Andrew Farmiloe, Terence Mitchell and Leonard Russell.
According to the annual return the company is owned by a range of shareholders including the above named directors, an ex-director John Woodroffe-Stacey, and three companies who own 9.5% shareholdings each: Dragon Wave Holdings, International Energy Investment and Yum Software SL. The three companies holding shares are presumably offshore – “SL” usually indicates a Spanish limited liability company. None of the directors appear to have a controlling interest (greater than 50%).
How secure is the investment?
Despite Asset Life plc’s statements on its website “The major advantage is that you know upfront what return you will receive over the 3 year period” and references to the product as a “deposit”, these investments are unregulated corporate loans and if Asset Life defaults you risk losing 100% of your money.
Asset Life plc states that the money is used to invest in “startup firms and established businesses with perceived long-term growth potential”. Start-up investment is a high-risk area and your return is dependent on Asset Life plc being able to make sufficient returns from its investments to pay investors 8.75% per annum. If it fails, there is a risk of default.
Asset Life plc states that there is a “Lenders Guarantee” which means that if Asset Life plc defaults, investors will be covered by an insurance policy which will pay up to £250,000. The insurance policy is provided by Klapton Insurance, which is registered in the Autonomous Island of Anjouan, Union of Comoros.
As a Comoran company there is a very little verifiable information available on Klapton Insurance. Asset Life plc states that Klapton has been rated as “An international scale claims paying ability rating of B- (single B-) with a stable outlook” by Global Credit Ratings, who describe themselves as “Africa’s no.1 rating agency”. I have asked Global Credit Ratings to provide us with a copy of the credit report, and they have refused, stating “I believe the Klapton report and rating are private and hence we are not in a position to provide this”.
This gives us very little to go on as to whether Klapton has sufficient resouces to compensate investors should Asset Life plc default on its bonds.
Should I invest with Asset Life plc?
This website does not provide investment recommendations, however investors should consider the following generic principles before proceeding with this investment:
As with any unregulated corporate bond, 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.
Before placing any reliance on the “Lenders Guarantee”, investors should undertake professional due diligence to confirm that a) Klapton Insurance has sufficient resources to meet all investors’ claims in the event that Asset Life plc defaults, b) that the insurance contract has been properly drafted to ensure that it will pay out as described.
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 insurance contract with Klapton can be relied on?
If you are looking for a “protected” or “deposit” investment, you should not invest in unregulated products with a risk of 100% capital loss.