Two investor groups set up for London Capital & Finance bondholders

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Two groups have been set up on Facebook for London Capital & Finance investors looking for information after the Financial Conduct Authority shut down the company pending an ongoing investigation.

The first, London Capital & Finance Bondholders, was set up on the 3rd January and is currently the larger of the groups with a couple of hundred members. The group is not allowing anyone other than investors to join and bondholders are only allowed to post if their posts are approved by a moderator.

The second, London Capital & Finance Action Group, has been set up to explore any avenues (legal or otherwise) investors can take to safeguard their funds. It was set up a couple of days ago and for that reason numbers just under 20 members at time of writing, but is growing rapidly.

I have been told that the larger Bondholders group has refused entry to anyone offering legal advice or other outside help (i.e. non-bondholders), which makes co-ordinating legal action practically impossible. The Action Group was therefore set up for investors who are not willing to simply watch and wait.

It should be noted that at this point it is unknown whether any investors have lost money, and London Capital & Finance’s limited communications to bondholders since the asset freeze have repeatedly stressed that none of its underlying loans have failed to pay money back to LCF.

Note however that “none of our borrowers have defaulted” is not the same thing as “we have enough money to pay all our investors back in full”. Even if all London Capital & Finance’s underlying loans are paid back in full, capital loss can still occur if the returns from these loans are not enough to cover London Capital & Finance’s costs (including the c. 20% fundraising costs disclosed in its last accounts) and the interest paid out already.

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One thought on “Two investor groups set up for London Capital & Finance bondholders

  1. A lot of people seem to be hanging to the line from LCF “None of our loans have defaulted up to now” without understanding that it’s entirely possible for other things to be done to prevent default and ensure that the statement remains valid. Yet as you correctly point out the loans may still not be sufficient to repay investors. One loan was made at 9%, there is no way that can recover the commission fees and be able to pay investors/bondholders back their 8% interest

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