Magna Global (aka MIX1 and MIX2) – we review their unregulated bonds paying 11.7% – 12% a year

Magna Group (aka Magna Asset Management) is offering unregulated bonds paying interest over 12 months or 18 months as follows:

  • 12 months: Pays interest of 12% over the one-year term, rolled up and paid out at the end of the year. Issued by MIX2 Limited.
  • 18 months: Pays interest of 18% over an eighteen month term, rolled up and paid out at the end of the 18 months, which is equivalent to 11.7% annual interest on an Compound Annual Growth Rate basis. Issued by Magna Investments X Ltd, aka MIX1.

Investment in the 12 month MIX2 loans has a minimum investment of £30,000, while investment in the 18 month MIX1 loans has a minimum investment of £10,000.

The lower minimum investment is the only concrete reason I can think of for investing in the longer term loans, given that they pay the same rate of simple interest despite having a longer term (and therefore having higher liquidity and default risk).

While Magna Group’s literature has been approved by an FCA-authorised company (Equity for Growth (Securities) Limited), the investment itself is unregulated, being a loan note issued by a non-FCA-authorised company.

Who are Magna Group?

MIX2 Limited is wholly owned by CEO Chris Madelin, while MIX1 is owned 50/50 by Chris Madelin and Acquisitions Director Oliver Mason.

Magna Asset Management, which appears to be the central corporate entity of the Magna Group (which includes at least 20 UK registered companies), is owned in equal proportions by Madelin, Mason and Development Director Jonathan Beach.

directors
L to R: Chris Madelin, Oliver Mason and Jonathan Beach.

Magna Asset Management was incorporated in February 2015 and its last accounts, made up to 31 December 2017, show net assets of £1,790. This predominantly comprised £6.1 million of debtors (amounts owed to Magna Asset Management by other Magna companies) minus £6.1 million of creditors (predominantly loans from investors, as well as some amounts owed to other Magna companies). These accounts were unaudited due to Magna Asset Management’s small size, and did not include a profit and loss account.

The two bond issuing companies, MIX1 and MIX2, were incorporated in June and July 2018 respectively and are too young to have filed accounts.

How safe is the investment?

These are unregulated investments into a micro-cap property business and if Magna Group is unable to make sufficient returns from its property investments, or for any other reason runs out of money to service its bonds, it may default on payments of interest or capital.

Magna Group’s literature is commendably clear in this regard, making it clear from the cover page onwards that investors’ capital is at risk.

Asset backed loans

Investors have a charge over any property purchased by MIX1 / MIX2 or its subsidiaries and a floating charge over all the assets of MIX1 / MIX2 or its subsidiaries.

Investors should not assume that as the loan notes are to be backed by property, there is no risk of losing money.

Investors in asset-backed loans have been known to lose 100% of their money (e.g. Providence Bonds and Secured Energy Bonds) when it turned out that there were not enough assets left to pay investors after paying the insolvency administrator (who always stands first in the queue).

We are not in any sense implying that the same will happen to investors in Magna Group, only illustrating the risk that is inherent in any loan note even when it is a secured loan.

If investors plan to rely on this security, it is essential that they undertake professional due diligence to ensure that in the event of a default, the assets of MIX1 and MIX2 are valuable and liquid enough to raise sufficient money to compensate all investors.

Investors should note that they are investing in two newly formed companies, Magna Investments X Limited and/or MIX2 Limited, and the assets and property projects of the wider Magna Group are irrelevant as far as the charges over the assets of MIX1 and MIX2 are concerned.

According to a factsheet for the MIX1 investment (the 18 month bond), available to download from the Magna Group website, investors in MIX1 have a “share charge” over the shares in Magna Asset Management Limited held by Chris Madelin and Oliver Mason.

It is not clear whether this is the case for the MIX2 investment (the 12 month bond). There is no mention of a share charge in the MIX2 factsheet, but there is a passing mention of share charges in the MIX2 Information Memorandum under Risk Factors. However no specifics are provided anywhere else in the MIX2 document.

Investors will need to clear this up as part of their due diligence. In addition, bearing in mind that Magna Asset Management Limited has net assets of £1,790 according to its last published accounts, if they are planning to rely on the security offered by the charge over 66% of its share capital, they should undertake professional due diligence to verify that the assets of Magna Asset Management Limited would be valuable and liquid enough to compensate investors.

Should I invest in Magna Group?

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 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 yields of up to 12% a year should be considered very high risk. As an individual, illiquid security with a risk of total and permanent loss, Magna Group’s bonds are much higher risk than a mainstream diversified stockmarket fund.

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?

The investment may be suitable for high net worth and sophisticated investors who will already be well aware of all of the above risks, are looking to invest a small part of their assets in corporate lending, have done sufficient due diligence, and feel that the return on offer (12% over one year or 11.7%pa over 18 months) is sufficient for the risks involved in lending to a new startup company.

If you are looking for a “secure” investment, you should not invest in corporate loans with a risk of 100% loss.

30 thoughts on “Magna Global (aka MIX1 and MIX2) – we review their unregulated bonds paying 11.7% – 12% a year

  1. Compared to High street group HSG, how better or worse is MIXG? Can anyone with experience perhaps shed some light into this and provide advise?

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  2. Determining which of Magna Global and High Street Group is a better investment is well beyond the scope of this blog. As both are unlisted micro-cap firms, that is a job for a corporate finance professional specialising in due diligence, who has reviewed the financial position and cashflow forecasts of both.

    No idea what MIXG is. Feel free to send details via the Contact page. If it’s a loan to Magna Global under a new name, then the generic risk warnings and considerations in the review above still apply.

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  3. Magna has not paid me out on my payment due date of Friday 28th February. There has been no communication whatsoever, they do not answer their phones nor do they reply to emails. I have been told by other people they have also not been paid by Magna and are considering legal action. What concerns me as much as their failure to pay my money is their lack of communication and ignoring my calls, emails and messages. I am furious and should have listened to my gut not to invest in Magna or Chris Madelin. Begining to believe this is a legal scam or pyramid scheme.

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  4. I work for an investment bank and gave Magna’s information memorandum to a colleague involved in property acquisitions for over 40 years. His advice, “Don’t go near this with a barge pole, you will lose your money”.

    The very persuasive salesman was keen to tell me numerous time about a first charge on assets and assets held in security by a regulated trustee. However, included within the information memorandum is the following:

    The Company does not have any assets currently and therefore lenders have no existing
    security.
    The Company undertakes that it will not utilise
    payment of commissions to the brokers that promote this raise of the Company and its
    subsidiaries (if any) more than 39% of the Loan Notes subscription. Accordingly,
    of property assets held under charge b
    monies invested by way of the Loan Notes.

    If 39% of the money I’m investing goes on commissions to brokers? How on earth are they able to straight away lose 39% of the funds, and payback an additional 38% in interest to the investor??

    Not going anywhere near it.

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  5. Worrying to read the above feedback about Magna Global. They seemed like a professional outfit.

    Have any other lenders had any correspondence with Magna? Are they paying lenders / investors back?

    Liked by 1 person

  6. Where is Chris Madelin, Magna’s CEO? Weeks ago he promised an update to lenders but hasn’t sent one.

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  7. Have you received any correspondence from Chris Madelin yet Peter? I have been sent the following emails, he is no longer on LinkedIn.
    Dear Investor,

    We write to you as an investor in MIX2 Limited.

    When you invested in MIX2 Limited (the “Investment”) you were given a brochure called an information memorandum (“IM”) dated 31 August 2018 or 6 November 2018. We notified you by email at the beginning of November 2019 that our approval of the IM was withdrawn on 13 August 2019.

    We write to provide some specific details in respect of the investment promoter fees which have been paid in relation to the Investment. Please see below for further details.

    The Financial Conduct Authority (“FCA”) has introduced new rules which took effect from 1 January 2020 regarding, among other matters, the format and description within an IM of fees paid to promoters from the monies raised from investors. These new rules were introduced because the FCA was concerned about consumers being misled on fees, costs and charges deducted from their investment.

    Equity for Growth (Securities) Limited (EFGS) who initially approved the IM you received, have agreed with the FCA that, going forward, disclosure of these fees in line with the new rules will assist investors to have a proper understanding of the business they are invested in, and to empower them to make any future investment decisions with knowledge of all material facts.

    Accordingly, we wish to inform you:

    22% of your investment was paid upfront to the promoters of the investment. This means that this percentage of your investment was not used to generate returns.

    78% of the subscription monies have been applied to the underlying business described in the IM.

    In the event you have any questions about this letter, you can contact EFGS directly on clientservices@equityforgrowth.com or, of course, you may wish to seek your own independent advice.

    Yours sincerely,

    Chris Madelin, CEO

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  8. I have Magna loans. They have defaulted and given no info for months. CEO Chris has left the country. Director J Beach was let go in 2019 along with R Davensac, C Eyre, and only Oliver Mason left now.
    Their FCA security trustee may be regulated but that doesn’t mean a thing with regards these loans. The trustee won’t enforce the security – presumably because they didn’t administer any charges over actual property in the SPVs. Looks like the only thing of value could be Magna Asset Management.

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  9. So Chris Madelin has left the country, surely there must be an investigation into his/their conduct? Does anyone know how much they raised and over what period? I did some digging and the 22% commission he refers to in his letter was paid to Hunter Jones, run by Reece Mennie. Hunter Jones are also an FCA Appointed Representative, operating under Equity for Growth Securities, the very same company appointed as Security Trustee on the loan notes!

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  10. Hunter Jones have been trying hard to find out what is going on.
    Commissions may be high but that is common. If Magna went to market forecasting how much it had to raise it would have known what it would receive net, and still felt able to buy properties / buy options with that money. That is a side issue. Question is what has been done with the millions of cash raised in each of the SPVs?
    MIX Limited
    MIX 2 Limited
    MIX 3 Limited
    MIX G Limited?

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  11. I’ve known Chris Madelin for a very long time through previous dealings and, based on how he treats people and does business, have kept safe distance from him for years. I am relieved I didn’t go anywhere near his loan notes, and neither did a family member of mine even though she was approached.

    “Question is what has been done with the millions of cash raised in each of the SPVs?”

    Some of Mr Chris Madelin’s purchases:

    – a Lamborghini
    – designer watches
    – designer suits
    – designer home furnishings
    – £25,000 designer handbags (for his partner)
    – £3,000 designer pairs of shoes (for his partner)
    – luxury five star holidays abroad

    He made sure he took astronomical amounts from Magna for himself.

    He spends more money on himself in a day than Warren Buffet does on himself in a year.

    I’m sorry you guys have been taken for a ride but I’m afraid you financed his extremely grandiose “Wolf of Wall Street”-like lifestyle.

    The reason both he and his accomplice Oliver Mason have suddenly deleted their Linkedin profiles etc. and he has scarpered abroad is he knows the game is up in terms of Magna. He’s now focused on making money from a completely different business.

    Don’t expect Equity for Growth Securities or anyone else that was part of these “schemes” I’ll call them out of politeness that took tens of millions of pounds from investors to do anything.

    Equity for Growth Securities will act as a cover to buy plenty of time for Chris Madelin and Oliver Mason to distance themselves from Magna. This so-called Security Trustee have made bagfuls of money from this set-up and will now be doing very, very nicely thank you.

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  12. So Chris Madelin agreed to pay Hunter Jones 22% commission on all assets raised, used client money for his own personal shopping sprees and then disappears to set up another business, how is this not fraudulent/criminal activity??
    I understand from previous posts on here that 20% commissions are the ‘norm’ but that has been for loan notes and bonds with a longer investment term, surely 22% for 1 year money is considered very expensive! even for a conman like Chris!
    Where is the accountability for an FCA Regulated Trustee? Some serious questions must be asked about their conduct having approved the IM, as stated above, and allow their Appointed Representative, Hunter Jones, to then receive 22% of all client funds invested?
    I hope this case is taken up by the SFO, City of London Police etc.

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  13. Hey listen we need to focus on where the money has gone. I have the loan note conditions and yes ok it allows up to 30% of the funds raised to be used for operational expenditure in some cases. Fine. With the PD and planning gains these guys have achieved in the past even 70% of funds raised would be enough to work their magic – IF they actually bought property.
    But what if this time they raised all that money and spent it on options instead of tangibel assets?
    There are no property charges registered in the MIX SPVs, which means the trustee has a case to answer.

    The letter issued by Chris that AI has shared shows a contempt for their introducers by Chris. Not very professional and not very nice. Perhaps now the money has been raised he doesn’t need them any more?

    I care less about the fact my introducer got a big fee and where the hell the rest of the funds are. The issue is why Magna won’t communicate? And is the trustee now covering his own conduct by taking his own time to enforce security? (Unless there is NO Security)?

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  14. Yes, you’re right Bob1968, the security trustee Equity for Growth Securities has been caught sleeping at the wheel or, far worse, actively complicit in this farce.

    The shady characters in a heist movie would be more trustworthy than the jokers who’ve been involved in this fiasco, right from the introducers who pocketed a huge percentage of the loaned money for themselves to the borrowers who spend more time shopping in malls in Dubai than working on the developments (the Gucci and Armani suits donned by Chris Madelin and Oliver Mason at their presentations at the Mayfair Hotel worked their magic though – boy did they suck in a lot of investors to screw over!) to Equity for Growth Securities who’ve done nadda other than to first create and then blindly support a ponzi scheme right along, even while it collapses right in front of their faces!

    Now E4GS are going out of their way to deliberately drag their heels to give Chris Madelin and Oliver Mason even more time to run to the hills and thereby minimise the chances of the loannote holders getting even a small ratio of their money back. You couldn’t make it up!

    This catastrophe is even worse than the London Capital & Finance debacle.

    Equity for Growth Securities will be pulled infront of the FCA because of this calamity and undoubtedly stripped of their Licence.

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  15. Emerald – so is anyone taking action?

    I would be keen to establish a creditors group or demand a lender meeting instead of waiting for Magna or the trustees to call one? We have to do something.

    Liked by 1 person

  16. Emerald and Bob, I’d also like to get in touch with any Magna investors.

    The triumvirate involved in this misdeed, Equity for Growth Securities, HJ and Magna have built a wall around them and either gone AWOL or won’t lift a finger. One loses their faith in humanity when these one sees how these miscreants are behaving despite each having made a pretty packet from this job.

    I’m hesitant to go to the police, SFO or FCA at this stage, but that might be the only option as absolutely nothing has been done even though I, like many lenders, were due to be paid in February 2020, four months ago now and still haven’t been.

    I am a school teacher, not on a large income, and now it looks like I’ve lost a lot of my life savings 😦

    My email address is oliviabrian2 [at] yahoo.com if any Magna investors would like to get in touch so we can help each other.

    Olivia from Belfast, Northern Ireland

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  17. Check out the Magna Creditors facebook group – you have to prove your loan certificate to be admitted.

    And email magnacreditors@gmail.com

    Let’s work together to work out what has happened, what our rights are, and how we get our capital back.

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  18. Guys, I’m also a Magna creditor. Been given the runaround since February this year when I was due my loan back.

    Both Magna and Equity For Growth (Securities) Limited are impossible to get hold of and never reply to me.

    Any other creditors, pls connect with me to share ideas. My email is buskhan {@} googlemail.com .

    Liked by 1 person

  19. IM OUT OF POCKET TO WAS TO HAVE MY MONEY BACK THIS WEEK BUT I CAN’T GET HOLD OF THEM NO EMAILS ANSWERED NO ONE PICKS UP THERE PHONE

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  20. Hello Emerald,Bob,Oliva, et al,

    Can anyone update me on the latest and where to join any groups I am an LNI on the Magna MIX2 debacle and was defaulted on in May 2020 I recently arrived back in the UK as I had to leave my family and home overseas due to covid and my loss of investment with these criminals!

    Sincerely,

    Marc

    email > marcwigleyntbh@gmail.com

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  21. Investors are able to breath a sigh of relief now the Magna men are talking again. Just received a call from Hunter Jones promising my money back or better, depending on options taken!
    DYOR –
    Regards, Ass Kicker.
    20/10/2010

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  22. Received emails from Magna & HJ but just options on voting on two resolutions which are another month off! I thought this was due now reading the last email?

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  23. And obviously no one knows what the resolution is.

    Can they not sell this stupid Dubai hotel land? Also they have listed this stupid project that would yield them £900k (over estimated maybe) which pays for nothing! This project according to their inflated profit estimates would yield £900k whereas they paid introducers in excess of £5m…imagine that…£5m!!!

    Coming back to their own estimates, they have raised near £20m in loan notes…they have pre-covid inaccurate valuation of £42m..let’s assume this is accurate. They have banks with first charge in the order of £30m..let’s see…the net assets are therefore a big red -£8m. Now let’s assume a very aggressive 20% reduction in asset values (it should be near 50%)..that’s nearly £8m shaved off the £42m giving £34m value. That means we have £4m left for the loan note holders..now the security trustee would charge 15% of assets…that’s £5m to £6m…so now we see that actually the first charge lenders would not be paid in full. So all loan note holders….you are forced to accept whatever shit resolution these fraudsters come up with otherwise all your capital is gone!!

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