The High Street Group

The High Street Group offers unregulated loan notes paying 18% after 18 months (11.66%pa compounded) or 5% every 6 months for 18 months (10.28%pa IRR).

The investment is not advertised via The High Street Group’s website but is publicly available on introducers’ websites.

Status

Open to new investment.

Who are High Street Group?

gforrest
Gary Forrest, High Street Group Chairman

High Street Group’s leadership is detailed on its website. Gary Forrest is the Chairman and owns 100% of High Street Grp Ltd, the parent company.

The investment literature states that the group was founded in 2006 but Companies House shows that High Street Grp Ltd was only founded in 2011. The High Street Group’s website was registered in November 2010.

The business appears to have taken off in the last few years, with net assets rising from £22,000 in the December 2015 accounts to £26 million in December 2016. This increase is primarily due to Investments of £26 million being recorded in 2016 vs nil in 2015. These investments are indicated to be High Street Group’s various subsidiary companies in the notes to the accounts.

The investment literature claims that the group made 26 million profit in 2016 and has 100 employees. This is curious, because that level of profit and workforce would require the group to file full accounts with Companies House, yet High Street Grp Ltd’s last accounts (30 December 2016) were filed under the small company regime. This means the accounts did not have to be audited or display a profit and loss statement.

How secure is the investment?

These investments are unregulated corporate loans and if High Street Group defaults you risk losing up to 100% of your money.

Investors’ money is secured against the assets of the group – specifically a “debenture over High Street Commercial Finance Limited” (one of HSG’s subsiaries) “along with a Corporate Guarantee from the group of companies”.

Before relying on this security, it is essential that investors undertake professional due diligence to ensure that in the event of a default, that their charge against the group’s assets is propertly recorded, and that the security is valuable and liquid enough to raise sufficient money to compensate investors.

Should I invest with High Street Group?

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.

Any investment offering 11.66% per annum yields should be considered very high risk (i.e. higher risk than a diversified portfolio of stockmarket funds).

This particular bond is described as asset-backed. Before relying 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 compensate all the investors c) their charge over the security will be properly and legally recorded.

Before investing investors should ask themselves:

  • How would I feel if the investment defaulted, the sale of the security failed to raise  enough money to compensate all investors, 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.

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10 thoughts on “The High Street Group

  1. Hello There. I have a problem with the high street group article? Is states that the company is unregulated – which is true. However, you have failed to mention Castle Financial Trust who both work on behalf of HSG’s investors and is both FCA and FSCS regulated? A company which will liquidate any assets of the company fails to make payment. What you also failed to mention in that the 15 years HSG has been alive, they have a 100% track record with every single penny been paid back to investors. Maybe you should get ALL the facts straight before you right an article like this.

    I would imagine you might want to amend this now. Thank you

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  2. Is states that the company is unregulated – which is true.

    Good start.

    However, you have failed to mention Castle Financial Trust who both work on behalf of HSG’s investors and is both FCA and FSCS regulated? A company which will liquidate any assets of the company fails to make payment.

    There is no such firm on the FCA register. And no such thing as “FSCS regulated”.

    An unregulated loan note issued by an unregulated company is an unregulated investment. Whatever FCA-regulated firms it may employ for ancillary duties is irrelevant.

    What you also failed to mention in that the 15 years HSG has been alive, they have a 100% track record with every single penny been paid back to investors.

    This oft-parroted cliche is completely meaningless. If they didn’t have a 100% track record they wouldn’t be soliciting investment.

    And added to that, the company soliciting investment (High Street Grp Limited) was only incorporated in 2011 (and was dormant until 2013), and its website domain was registered in 2010. There is no evidence that it existed prior to those dates.

    Maybe you should get ALL the facts straight before you right an article like this.

    Feel free to tell me which facts I haven’t got write.

    I would imagine you might want to amend this now.

    You imagine wrong.

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  3. https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000NMRMAAA5

    If you follow this link you will find that Castle Trust is in fact on the FCA register list. What you also wouldn’t know is that every single payment gets paid into Castle Trust before being transferred to HSG. This way Castle Trust are able to record every single transaction so whenever a financial body wishes to investigate the company financial – which they have multiple times – everything is above board and protected. I hardly think there is a likely hood of a £100,000 investment couldn’t be paid back using 69 million in assets.

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  4. If the company is so keen on multiple financial investigations, why does it not have its annual accounts audited?

    And why is High Street Commercial Finance Limited, the issuer of the loan note, four months overdue with its accounts?

    The company’s claims as to its financials are of no value from a due diligence perspective if they are not independently audited. No sensible lender lends their money based solely on what the borrower claims about their ability to pay.

    The fact that investors’ money goes in and out of a payment processor is similarly irrelevant.

    If High Street Group runs out of money to service its debts – an inherent risk with any loan to a micro-cap small company – the payment processor will most likely walk away, saying it isn’t being paid. Alternatively it would appoint administrators, which the creditors could do for themselves. The FSCS does not apply here.

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  5. The fact that the accounts are late pays no risk to the investors. The clients have a first legal charge on their investment, meaning HSG pay their investors before anyone else. Plus all investors are self certified – this isn’t just an investment for the general public. They do business with a very niche market of sophisticated investors.

    If HSG runs out of money? Yeah, I’m sure all those 69 million assets are just suddenly going to disappear? Their mutiple steams of liquidity plus their long list of assets is by far enough keep paying back returns.

    Obviously HSG themselves aren’t going to be FCA approved because they are in the property sector; they aren’t a financial body. Which is why we have Castle Trusy in place. FCA approved companies can still be cowboys. Even the biggest FCA approved companies make mistakes; the banks are the biggest cowboys in the market!

    Being FCA approved doesn’t even guarantee that you’ll get compensated. Which is obviously where the FSCS step in; who of which can compensate you. The security on this is so high and so important; which is exactly why HSG require all investors to be self certified first, and that they don’t offer this to the general public.

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  6. The fact that the accounts are late pays no risk to the investors.

    Well that’s alright then.

    The clients have a first legal charge on their investment, meaning HSG pay their investors before anyone else. Plus all investors are self certified – this isn’t just an investment for the general public. They do business with a very niche market of sophisticated investors.

    In which case I’m not sure why a blog pointing out what all your sophisticated investors will already know about the high risk nature of these investments is such an issue for you.

    If HSG runs out of money? Yeah, I’m sure all those 69 million assets are just suddenly going to disappear? Their mutiple steams of liquidity plus their long list of assets is by far enough keep paying back returns.

    Let’s be clear here, are you saying that no company with £69 million in assets can go bust?

    In any case, the issuer here is High Street Commercial Finance which has gross assets of c. £22.5m and net assets of £892k according to its most recent (and moth-eaten) accounts from Dec 2016.

    Being FCA approved doesn’t even guarantee that you’ll get compensated. Which is obviously where the FSCS step in; who of which can compensate you.

    Let’s be clear here, in exactly which circumstances are you saying the FSCS will compensate investors in High Street Group’s loan notes?

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  7. HSG have an estimated £700 million worth of developments in the pipeline for the next 2/3 years. There’s an extremely unlikely possibility of HSG going under with these plans in place. In case of a default in payment, Castle Trust will either refinance the properties with the bank so they can afford to pay clients, or even sell the buildings to make payments. There are multiple ways of ensuring payment for investors.

    And even in an unrealistic scenario that HSG for whatever reason do have to declare bankruptcy anytime soon, their massive residential buildings, chain of hotels and bars, homes all still have a value, and which would all be sold. Like I mentioned, the clients all still hold the 1st legal charge and will always be paid first no matter what.

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  8. High St Group are stating they have a 100% track record of paying back investors my loan note was due to mature in March but High St Group have defaulted on this and exercised the right to extend this by 6 months. When i contacted them as to why i would not be paid on time they said it was due to planning permission.

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  9. Curious. If HSG have £700 million worth of developments in the pipeline then why would one particular project meeting planning permission problems prevent HSG returning investors’ capital on time? No doubt Louis will be able to clarify.

    Planning permission problem is only the first stage in a retail development so how much is an extra six months’ going to help? How likely is it that even if planning permission is granted tomorrow, HSG can get the development built and ready for sale or refinance within six months?

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