We review Satchi Wealth’s bonds paying 8.5% per year

Satchi Wealth is offering three-year unregulated bonds paying interest as follows:

  • 8.5% per year for interest paid monthly
  • 9.5% per year for interest paid annually
  • 11% per year if interest is rolled up and paid out at the end of the term

A reader has reported being cold-called by an individual offering Satchi Wealth investments.

The investment literature for the bond is “orphaned” on Satchi’s main website (i.e. there are no links to it) but is made publicly available on a page accessible via Google.

Who are Satchi Wealth?

Satchi Wealth is described as a marketing and distribution division of Satchi Holdings plc. Satchi Holdings plc was incorporated in February 2019 while Satchi Wealth Ltd was incorporated as Investorwise International Limited in April 2018 by Jason Weeks, Clare Murphy and Paul Dodds in April 2018. Jason Weeks gave up his shares in Investorwise to Murphy and Dodds in May 2018; the two remaining owners then transferred the company to Satchi Holdings plc in April 2019. Paul Dodds remains the sole director of Satchi Wealth Ltd at time of writing.

Satchi Holdings plc is owned 50/50 by Jennifer McQueen and Danielle Mearns. Danielle Mearns resigned as a director in March 2019. Andrew Murray Smith and Michael Haston were appointed directors in March 2019.

At time of writing, Satchi Holdings’ website provides very sketchy details of its directors’ background. Particularly of note is Haston’s biography which states “Michael comes from private equity background and has been instrumental in accelariting [sic] the growth of various successful large-scale entities. Michaels [sic] key areas of expertise are Financial [sic] modelling and acquisitions”.

The company has claimed in a statement to Companies House that there is no registrable person or entity with control over the company. This appears to contradict its incorporation documents which declare that McQueen and Mearns each have 50% shares.

Satchi Wealth’s founder Jason Weeks was formerly a director of XG Concept Ltd from December 2010 to June 2015. In January 2015, XG Concept was investigated by HMRC and later alleged to have falsely claimed £360,240 in VAT Relief. Since January 2018 Weeks has been the sole director of Crypto Currencies Ltd and Crypto Currency Centre Ltd. It should be emphasised that after giving up his shares in May 2018, Weeks currently has no public connection with Satchi Wealth.

How safe is the investment?

Satchi Holdings’ website describes its business as “Property Asset Management” and “Asset Based Lending”. Under the second heading, it states

Every loan that Satchi makes to a company, is backed by security. What we mean by security, is strong underlying assets within the company which is seeking the loan.

Satchi then securitise the assets of the company by way of a legal charge, this in turn secures our business to business loans within the market and ensures that Satchi’s capital is secure.

It is important to understand that if Satchi Wealth is unable to make sufficient returns from its investments in leasing projects, or for any other reason runs out of money to service its bonds, investors risk losing up to 100% of their money.

Secured lending on property is not risk-free as there is a risk that if the underlying borrower defaults, the security cannot be sold for enough to cover the loan.

Investors in asset-backed loans have been known to lose 100% of their money 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 Satchi Wealth, 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 hire professional due diligence specialists (working for themselves, not Satchi) to confirm that in the event of a default, the assets of Satchi would be valuable and liquid enough to compensate all investors. Investors should not simply rely on what Satchi tells them about their assets.

This is especially important as it appears that investors are lending to Satchi Wealth Ltd, whereas it is Satchi Holdings that owns any property invested in.

Should I invest in Satchi Wealth?

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 loan note to an unlisted micro-cap company, 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 returns of up to 11% per year is inherently very high risk. As an individual, illiquid security with a risk of total and permanent loss, Satchi Wealth’s loan notes 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?

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 is sufficient for the risks involved in lending to a small company.

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

10 thoughts on “We review Satchi Wealth’s bonds paying 8.5% per year

  1. I found this very confusing as you have not updated your review in correlation to the new satchi bond where a lot of this information is incorrect and I was looking forward to see your review on the existing satchi bond not the old one.

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  2. The review is timestamped and was correct at the time of writing.

    I note that Satchi has since increased its interest rate to “up to 11% per annum” but I do not update historic reviews just because the company has changed the interest rate. If the only thing different is the interest rate then all the generic considerations applicable to high risk loan notes still apply.

    If there are any material differences between Satchi’s new offering and the old one, feel free to provide details here or via the Contact page.

    The only webpage materially out of date that I can see is Satchi Holdings’ own. “Our recently listed bond on the Vienna Stock exchange is available via SVS Securities and is ISA, SIPP & SSAS qualifying”. Evidently it isn’t as SVS Securities has just been shut down by the FCA for inappropriately pushing unregulated bonds to retail investors (not Satchi’s).

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  3. i’m a bit confused. as a first time investor, i was thinking of investing my savings with satchi. not so sure now.

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  4. i’m a bit confused. as a first time investor, i was thinking of investing my savings with satchi. not so sure now.

    These bonds are unsuitable for a first-time investor due to the inherent risk of 100% loss and the due diligence expertise required for successful investment in lending to unlisted companies.

    I want to invest £400000 in bonds is my money safe.

    Not if you invest in unregulated bonds or any other investment offering returns of 11% per year.

    i was advised by a broker Fortuno

    If that is true then Fortuno are committing a criminal offence. GIving financial advice in the UK without authorisation from the FCA is breaking the law under the Financial Services and Markets Act. There is no company called Fortuno on the FCA register.

    If you want advice then see an Independent Financial Adviser authorised by the FCA.

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  5. Had a call from a representative saying they were from Investment Solutions (very vague name) who then somehow became Montague Capital (I’m almost certain this has to be a nod to Romeo and Juliet) saying I had shown an interest in investing with them (never even heard of them til I was called by them) and what they had were Satchi Bonds. Surely if what they’re saying is accurate they wouldn’t be calling up random people to see if they could get people to sign up for whatever it is they’re trying to sell you.

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  6. Andy your comment is ridiculous many funds offer more than 10% please see below

    Analyst Merrill Ross, of Wunderlich Securities, in Memphis, Tenn., recommends Invesco Mortgage Capital (IVR, $22, 12.0%). Run by an affiliate of the Invesco mutual fund group, the REIT owns residential and commercial mortgages. About 70% of its investments are “agency” loans, those backed by the likes of the Government National Mortgage Association. A relatively high 17% of the portfolio is in higher-yielding but riskier non-agency loans, though rising property values mitigate some of the danger.

    Jason Stewart, head of research at Compass Point Investments, a Washington, D.C., firm, likes AG Mortgage Investment Trust (MITT, $25, 13.0%), in part because 18% of its portfolio’s assets are in non-agency loans. Stewart is also high on AG’s execs; they’re affiliated with hedge fund operator Angelo, Gordon & Co., which has a superior record. For more diversification, pick between two ETFs that specialize in this group: iShares Mortgage REIT Capped ETF (REM, 11.1%) and Market Vectors Mortgage REIT Income ETF (MORT, 10.2%).

    Business development companies may be esoteric, but they are hardly undiscovered. The stocks have been sizzling of late, so it has become tougher to find attractively priced high yielders, says analyst Greg Mason, of Keefe, Bruyette & Woods. One BDC that does pass muster with Mason is KCAP Financial (KCAP, $10, 11.0%), which specializes in some of the riskier pockets of the lending market. The New York City firm’s loan portfolio is filled with high-risk, high-return loans. But Mason says KCAP’s executives are highly skilled and will likely minimize defaults.

    ome leveraged closed-end muni bond funds also scale to 10%-plus heights. Like the block of BlackRock funds mentioned earlier, these four Invesco funds—Advantage Municipal Income Trust II (VKI, $13, 6.6%), Municipal Opportunity Trust (VMO, $15, 6.6%), Municipal Trust (VKQ, $14, 6.4%) and Trust for Investment Grade Municipals (VGM, $15, 6.6%)—employ similar strategies, only they do so with tax-free debt. The funds invest mainly in long-term high-quality bonds that finance such things as airports and hospitals. For investors in the top 39.6% bracket, a tax-free yield of 6.6% is equivalent to 10.9% from a taxable investment. All four funds recently traded at small discounts to NAV.

    If you’re willing to go for broke to earn the best yields, consider Northern Tier Energy (NTI, $27, 20.6%). The Ridgefield, Conn.–based pipeline and refining firm has made only two distributions since going public last year, so the yield is based on what’s been paid so far. If Northern Tier’s profits keep rising, as analysts expect, it will continue to make rich distributions. But commodity prices are volatile, so profits, payouts and the share price could be, too.

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  7. John, see the note elsewhere on this very page:- “Satchi Wealth, which offers three year unregulated bonds paying up to 11% per year, has been issued with a strike off notice after failing to file an up to date confirmation statement.
    Failure to file a confirmation statement on time is a criminal offence under the Companies Act. If Satchi fails to file an up to date confirmation statement within two months of the notice and no objections are receiver, the company will be struck off the register and will forfeit its assets to the Crown.
    Satchi’s website remains up and continues to promote investments offering 11% per year and claim that they offer “Protected Revenue Stream / Ongoing Contract with Local Authority / Low Variable Business Model” despite the inherently high risk nature of its unregulated investments.”

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  8. John – I see above you wrote “Andy your comment is ridiculous many funds offer more than 10% please see below”. I located the article you were quoting which is here:
    https://www.kiplinger.com/article/investing/T052-C000-S002-investment-ideas-that-yield-10-percent-and-more.html

    It was published in 2013. I went through every single recommendation they made and without exception they have all fallen in value since 2013, some very badly, which nicely proves the point that unusually high returns come with substantial risk.

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