We review Cafelavista’s coffee machine investment paying 15% per year

Cafelavista logo

Cafelavista offers returns of 15% per year to investors who invest in its coffee machines.

Investors buy coffee machines for £3,000 each (+ £600 VAT if they are not VAT registered) and then rent back their machine to Cafelavista, which promises to pay a total of £5,700 per machine back to them (in rental income, an annual “ingredient bonus” and a final “balloon payment”) over a six year term, after which Cafelavista promises to take the vending machine back.

This gives an average return of 15% per year, or 9.7% if the investor has to pay £600 VAT on top of their initial purchase.

Continue reading for a review of Cafelavista's coffee machine investment.

We review Divitias Wealth’s loan notes paying 12% per year

Divitias Wealth logo

Divitias Wealth plc offers "Private Offering Protected Fixed Income Bonds" with a 24 month term which pay interest of 1% per month, with coupons paid quarterly.

Investors' money is to be used to invest in "delta neutral" arbitrage trading - identifying a mismatch between prices for the same asset on different exchanges, buying assets at the cheaper price and immediately selling them at the higher one.

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Magna Global’s MIX2 posts £1 million loss as owner scrubs luxury lifestyle from Insta

Struggling property investment scheme Magna Global has filed July 2019 accounts for its MIX2 entity, reporting a £1 million loss.

This follows Magna investors reporting they have not been repaid on time, and one of Magna's other companies which took in money from investors, Magna Investments X (aka MIX1), also posting a £1 million loss.

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Basset & Gold: minimal recoveries expected for investors, 20% commissions paid

The administrators of collapsed West Ham sponsor Basset and Gold have released their initial report.

Around 1,800 people, described as "everyday investors" by the administrators, invested nearly £36 million into Basset & Gold after being recruited by "internet based marketing and social media campaigns".

Despite Basset & Gold's literature claiming that investments were "backed by assets, such as property, corporate debentures and other forms of security in order to PROTECT our investments and your capital", virtually all of investors' money was loaned to a payday lender called Uncle Buck.

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Treasury proposes raising hoop for unregulated investments to jump through

On 20 July the Treasury proposed a tweak to the rules surrounding promotion of minibonds and other high-risk unregulated investments sold to the public.

Currently, any firm which is authorised by the FCA, no matter how obscure, can approve a financial promotion for an investment security, giving the investment the green light to be sold to the public.

It would not be fair to say that to be able to flog an unregulated investment security to the public, you need to cut out two tokens from a packet of breakfast cereal and send it to the FCA. What you need to do is hire someone else who at some point has sent in their tokens, and get them to approve your adverts.

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Carlauren administrator update: CEO Sean Murray bankrupt

The administrators of Carlauren Group have released their first report.

As previously covered, Carlauren Group holds a total of £21.7 million in properties going by their purchase prices (with one unknown), despite reportedly taking in £76 million from investors.

A £40 million asset freezing order has been placed on Carlauren owner Sean Murray. Murray subsequently filed for bankruptcy. Carlauren's administrators, Duff & Phelps and Quantuma, have been appointed as receivers and are investigating his personal financial affairs.

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Aston Darby Ponzi scheme shut down by Insolvency Service, £26m potential losses

Aston Darby, which offered investment in car parking spaces paying 11% per year, has been shut down by the Insolvency Service after winding up petitions were presented in June. Reviews on Google allege the company defaulted on interest payments as early as 2018.

According to the Insolvency Service, Aston Darby operated as a Ponzi scheme by paying off investors with new investors' money rather than revenue from its car parks.

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Fortitude Capital goes into administration

Fortitude Capital has collapsed into administration. Neil Bennett & Alex Cadwallader of Leonard Curtis have been appointed as administrators.

The administrators were appointed by a secured creditor, which based on Companies House's list of charges is most likely to be Fortitude's Security Trustee, More Group.

I reviewed Fortitude Capital's bonds in September 2018 and noted that, despite Fortitude's owner Ajaz Shah claiming in literature that "The foundation of Fortitude is capital preservation", the bonds were inherently high risk.

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We review Pardus’ loan notes paying 1% per month

Pardus bond logo

Pardus offers loan notes with a 24 month term which pay interest of 1% per month, with coupons paid quarterly.

At least, that's what their website says, but Pardus is offering special terms via introducers where that return is doubled to 2% per month, with a 2% initial charge.

As for what this means overall, Pardus' brochure includes a worked example which calculates that the total returned for a £100,000 investment - if all payments are made successfully - would be £147,040. This is equivalent to an annual compound return of 21.3% per year.

Continue reading for a review of Pardus' fixed income bonds.