Davenport Laroche offers an unregulated investment in shipping containers, which promises returns as follows:
- “Conservative Lease” – fixed returns of 12% each year
- “Higher Income Lease” – variable returns, described as “up to 24.13% ROI”. Later in Daveport Laroche’s promotions, this 24.13% figure is also described as the historic return for 2016.
In both cases, Davenport Laroche promises to buy the containers back after 5 years at cost price.
Who are Davenport Laroche?
Davenport Laroche is a company registered in Hong Kong. According to a news item on Davenport Laroche’s website, the company is headed by Jacques Piccard.
Piccard’s corporate biography is extremely sketchy. According to the company, he worked for the collapsed bank Bear Stearns until 1994, left to take up a private research position alongside “former apprentice master Pierre Durand” (what?) and moved back to Switzerland in 2003 to continue Durand’s work (presumably now as a master apprentice). After founding an unnamed school of economic instruction in Lausanne, Piccard was recruited to consult for a container leasing company, and from this went on to found Davenport Laroche.
By nature, neither Piccard’s position at a long-collapsed bank or his subsequent work in private research and teaching is verifiable. It is quite possible that Jacques Piccard does not exist, with the actual controllers of Davenport Laroche being unknown individuals from Hong Kong or elsewhere in Asia.
Marketing literature from the company (e.g. this quite obviously self-published article on moneyinc.com) claims the company was founded “in the wake of” the 2008 financial crisis. However, whois.com shows that davenportlaroche.com was only registered in 2013 and archive.org only began retrieving content from that domain in 2015.
The Hong Kong company was founded in 2011, but was only known as Davenport Laroche after a name change in January 2014. It is very possible that the people behind the company acquired an already-existing Hong Kong company and renamed it.
Either way, the founding of the company was quite clearly considerably more recent than 2008.
How safe is the investment?
This is an unregulated investment into shipping containers (and, in terms of the “Conservative Lease”, Davenport Laroche itself) and you risk losing up to 100% of your money if Davenport Laroche fails to generate sufficient returns from its shipping contains to pay the promised returns, and/or buy your container back.
With the Conservative Lease, investors are effectively investing into Davenport Laroche itself. The returns from their shipping container are only indirectly relevant. It does not matter if the shipping container makes less than 12%, as Davenport Laroche should be obliged to pay the difference. Likewise if the shipping container makes more than 12%, the extra goes to Davenport Laroche.
This means that your 12% per annum, and the ability to get your money back by selling the container after five years, is dependent on the financial strength of Davenport Laroche. Investors should focus their due diligence on Davenport Laroche’s finances, not the shipping container.
Investors in the Higher Income Lease, on the other hand, are entirely reliant on Davenport Laroche continuing to find renters for its containers.
Given that Davenport Laroche claim to have historically paid out 24% per annum, investors are very dependent on the ability of Davenport Laroche to find clients willing to pay over the odds for shipping containers, instead of renting from one of its rivals that does not offer 24% per annum returns to investors.
Marketing literature from Davenport Laroche claims “They [the containers] will not lose their value either, as they hold material and functional value.”
This is directly contradicted only a couple of paragraphs above, where it states “All containers are built to full ISO-standards, meaning they have an expected lifespan of 20 years.”
In other words, the shipping containers would be expected to lose 5% of your initial investment each year on a straight-line depreciation basis, and become worthless after twenty years.
This means investors are even more reliant on the financial strength of Davenport Laroche. If the value of a new shipping container remains constant, no-one else is going to buy a 5-year-old shipping container from you at cost price, given that on a straight-line depreciation basis, it will have lost 25% of its value.
In the worst case scenario, you risk losing up to 100% of your money if Davenport Laroche fails to make enough money from its shipping containers to pay the promised returns, and a buyer cannot be found for your shipping container, or the shipping container depreciates to the point of worthlessness.
Illegal financial promotions
Davenport Laroche is being promoted to UK investors via ads on Google. One testimonial on Davenport Laroche’s own website is from a “Michael Frost, United Kingdom”.
It is illegal for companies to issue financial promotions in the UK unless they are regulated by the Financial Conduct Authority or are “passporting-in” from another EEA regulator. A search for Davenport Laroche on the FCA register produced no results, and Davenport Laroche does not claim authorisation from any regulatory body in its literature.
The promotion of this investment to UK investors is illegal without FCA authorisation.
Should I invest with Davenport Laroche?
This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.
As with any individual unregulated investment, 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 up to 24% per annum yields is extremely high risk. As an individual security with a risk of total and permanent loss, Davenport Laroche is much higher risk than a mainstream diversified stockmarket fund.
Davenport Laroche’s repeated description of this investment as “low risk” is highly misleading.
Multiple investors have alleged that Davenport Laroche is in reality the same company as Pacific Tycoon, a very similar Hong Kong based investment in shipping containers. Pacific Tycoon has a long string of complaints from investors who have already failed to receive promised returns, going back to 2016. Several investors have reported that on calling Davenport Laroche, the phone was answered as Pacific Tycoon.
Given these allegations, the inconsistencies in Davenport Laroche’s literature and the misleading statements about the risk profile of the investment, investors should not proceed unless they are happy to risk 100% loss.