Westway Holdings

Westway Holdings offers unregulated fixed-interest bonds paying 7.5%pa over a five year term.

Curiously, the return is 7.5%pa if interest is paid out to the investor annually, but only 7.34%pa if interest is rolled up and paid out at the end of the five years. The roll-up version is described as a “5 Year deferred income plan” and pays out 37.5% (7.5 x 5) plus a 5% bonus, for a total of 42.5%. A 42.5% return after five years is equivalent to 7.34% per annum compounded. This means that investors receive a lower return if they roll up interest, despite the use of the word “bonus”.

The statement in Westway’s brochure that their bonds pay “up to 8.5% annual return” is inaccurate. A bond which pays 42.5% at the end of five years does not pay a 8.5% annual return, the annual return is 7.34%. The use of compound annual return rather than simple interest is near-universal in the finance industry.

Status

Open to new investment.

Who are Westway Holdings?

Westway Holdings was incorporated on 3 September 2015.

Westway’s Holdings’ “About Us” page contains full details of the directors, who are Antony Marks (Director & CFO) and Richard Birch (Director of Operations).

Despite Marks being described as “CFO” (in a traditional corporate hierarchy, this means Chief Financial Officer, the second highest post next to the Chief Executive Officer), Companies House shows that he owns 80% of Westway Holdings and this, combined with his director bio being listed first, suggests that he is the head of Westway Holdings.

How secure is the investment?

These investments are unregulated corporate loans and if Westway Holdings defaults you risk losing 100% of your money.

Westway states that investors’ money is invested in Supported Housing for tenants such as people with disabilities, ex-offenders and substance abusers. Its income comes from the Government but investors should not confuse this with their investment being backed by the government. If the rent paid by the Government / other tenants is insufficient to pay investors a 7.5% return, investors may lose their money.

Westway makes clear on its website and brochure that the investment is not covered by the Financial Services Compensation Scheme.

Bonds are secured against the assets of the company, with an independent trustee (More Group UK) appointed to monitor asset values to ensure that Westway’s debt does not exceed 90% of the value of their assets, and take control of the assets in the event that Westway defaults.

Before placing any reliance on the security backing the bond, investors need to assure themselves that in the event that Westway defaulted, the Security Trustee would be able to sell the assets for enough money to compensate investors. While the assets are revalued bi-annually by independent valuers, investors need to bear in mind that Westway’s assets (Supported Housing properties) are designed to be occupied by vulnerable tenants and cannot be sold as easily as a property occupied by private tenants who can simply be given notice. The market for such properties is likely to be restricted.

Should I invest with Westway?

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 described 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 due diligence to ensure the asset-backed security can be relied on?

If you are looking for “security”, you should not invest in unregulated products with a risk of 100% capital loss.

Advertisements

13 thoughts on “Westway Holdings

  1. All of this information comes too late for investors such as myself. If the information had been published 6 months ago I might have thought twice about investing in the company especially if Jack Allen, (a former employee of Moneyseed had been more honest.

    Like

  2. Curiously, you purport to be an expert on this bond when actually many of your statements are factually incorrect and seem designed to scare people. Particularly when talking about rates of return and risk factors. I would suggest that interested parties pay more attention to the Information Memorandum of the company’s bond that has been signed off under Section 21 of FSMA and Companies House records that clearly show all assets and charges over them as well as risks with mitigating factors, which you seem to have no interest in mentioning.
    Are you regulated in any way? What are your credentials? [BrevEdit – Silly abuse removed.]

    Like

  3. Curiously, you purport to be an expert on this bond when actually many of your statements are factually incorrect and seem designed to scare people.

    Feel free to point out which statements are factually incorrect.

    I would suggest that interested parties pay more attention to the Information Memorandum of the company’s bond that has been signed off under Section 21 of FSMA and Companies House records that clearly show all assets and charges over them as well as risks with mitigating factors, which you seem to have no interest in mentioning.

    Section 21 signoff by a company paid by the company asking you to lend them money is not a substitute for due diligence.

    Westway Holdings’ last accounts filed with Companies House were unaudited.

    This is a review about the inherent risks of investing in an unlisted micro-cap company. If you are looking for unverified assertions from the company asking for money, then you should pay more attention to the Information Memorandum.

    Are you regulated in any way? What are your credentials?

    You first.

    Like

  4. Westway Holdings pay 8.5% per annum over 5 years not 7.5% as you wrongly report. The 5 year differed bond pays 10% per annum totalling 50% not the 42.5% you wrongly report. This is not compounded as, once again, you wrongly report.
    Any Section 21 sign off is undertaken by an independent, FCA “authorised” firm who will conduct detailed due diligence on the statements made in the investor documentation. In essence, everything will be checked and verified by supporting documentation. This can be a time consuming and detailed process with every substantive statement in the investor document being checked against supporting third party evidence. For this reason, the Section 21 sign can in fact be considered a valid part of any due diligence.
    I see no need to provide my credentials as I am not the one posting what will obviously be seen as an informed opinion. If you wish to put yourself forward as someone who potential investors should pay attention to, then I suggest you make sure you are in possession of the actual facts.

    Like

  5. Finally, it is worth stating that every investor to date has received every coupon payment due, with over £2 million repaid upon maturity of historical bonds.

    Like

  6. Westway Holdings pay 8.5% per annum over 5 years not 7.5% as you wrongly report. The 5 year differed bond pays 10% per annum totalling 50% not the 42.5% you wrongly report.

    The article is clearly timestamped and was correct at the time of publication, as per Westway Holdings’ investment literature at the time.

    If Westway Holdings have since needed to increase the rates they offer, that doesn’t make the review wrong.

    Any Section 21 sign off is undertaken by an independent, FCA “authorised” firm who will conduct detailed due diligence on the statements made in the investor documentation.

    Unverified assertions from the borrower or someone working for the borrower are worthless from a due diligence standpoint.

    Actual due diligence by someone independent of the borrower is required if the lender wishes to ensure that the Section 21 sign off isn’t another Independent Portfolio Managers.

    I see no need to provide my credentials as I am not the one posting what will obviously be seen as an informed opinion.

    Fair enough. I agree entirely that you do not need credentials to post your uninformed opinion.

    This review is not an opinion piece. The facts stand for themselves.

    If you wish to put yourself forward as someone who potential investors should pay attention to, then I suggest you make sure you are in possession of the actual facts.

    If the only thing you can identify as a supposed inaccuracy is that Westway Holdings changed its rates after the article was published, then I think we have established that I am.

    Finally, it is worth stating that every investor to date has received every coupon payment due, with over £2 million repaid upon maturity of historical bonds.

    And?

    Like

  7. I presume that now you are aware of the actual facts as of this date that you will be changing your post to reflect them. When will you be doing so?

    Like

  8. I would urge you to contact Westway Holdings, request an Information Memorandum and read it prior to changing your post.

    Like

  9. Why not? Your review is inaccurate and obsolete and therefore is misleading, directly going against your whole ethos of providing a pertinent review. You plainly have no real interest in providing an accurate account and obviously have an ulterior motive.I shall be bringing this to the attention of the relevant regulators.

    Like

  10. The imaginary regulator who ensures that everyone who writes an article about a financial product edits their article post-publication every time the provider changes their rates?

    Yeah, I wouldn’t waste your time. I went to school with the chairman.

    The article is accurate as at the date of publication, and everything other than the rates still stands.

    Oh, and other than the bit about the directors. Richard Birch has left the company, and for reasons that are unclear, Westway owner Anthony Marks is no longer listed under the directors’ bios on the website, despite still being a director and still controlling the company (via a company registered in Estonia).

    None of that alters the fundamental nature of the investment.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s