Cauta Capital offers unregulated corporate bonds paying 7% per annum on investments of £20k – £35k, 8% per annum on £35,000 – £75,000, or 9% per annum on £75,000 and above.
The website says that funds may be withdrawn after a minimum of 3 years or a maximum of 10 years. There is no indication that the interest rate is higher for investing for longer than 3 years.
Open to new investment.
Who are Cauta Capital?
There is no information on the website on who the directors or owners of the company are.
Companies House shows that there is one director, William Abundes, who is also the sole shareholder.
The company states that it has “a successful track record since 2009”. Companies House records show that Cauta Capital Limited was only incorporated on 10 April 2015 and WHOIS shows that its website was registered on 24 February 2015. This discrepancy is not explained on the website.
Is Cauta Capital safe?
This is an unregulated corporate bond and if Cauta Capital defaults you risk losing 100% of your money.
The Cauta Capital website confirms that the bond is not covered by the Financial Services Compensation Scheme.
The Cauta Capital website says that the bond is ”asset backed” although it does not specify what assets it is secured on. However, if Cauta Capital defaults on its investment, and the assets the bond is secured on cannot be sold to meet all investors’ claims, investors still risk losing up to 100% of their money.
A company called “Jade State Wealth” is listed as the Security Trustee. Jade State Wealth has net assets of £112,413 according to its 2016 accounts.
Should I invest with Cauta Capital?
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.
This particular bond is advertised as asset-backed. Before putting any reliance on the security backing the bond, investors should undertake professional due diligence to ensure that a) the security exists b) in the event of default, the security could be easily sold and would raise enough money to cover all investors’ money c) the charge over the security has been properly and legally recorded.
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 sufficient due diligence to ensure the asset-backed security can be relied on?
If you are looking for a “secure” or “guaranteed” investment, you should not invest in unregulated products with a risk of 100% capital loss.