The High Street Group offers unregulated loan notes paying 18% after 18 months (11.66%pa compounded) or 5% every 6 months for 18 months (10.28%pa IRR).
The investment is not advertised via The High Street Group’s website but is publicly available on introducers’ websites.
Open to new investment.
Who are High Street Group?
High Street Group’s leadership is detailed on its website. Gary Forrest is the Chairman and owns 100% of High Street Grp Ltd, the parent company.
The investment literature states that the group was founded in 2006 but Companies House shows that High Street Grp Ltd was only founded in 2011. The High Street Group’s website was registered in November 2010.
The business appears to have taken off in the last few years, with net assets rising from £22,000 in December 2015 accounts to £26 million in December 2016. This increase is primarily due to Investments of £26 million being recorded in 2016 vs nil in 2015. These investments are indicated to be High Street Group’s various subsidiary companies in the notes to the accounts.
The investment literature claims that the group made 26 million profit in 2016 and has 100 employees. This is curious because that level of profit and workforce would require the group to file full accounts with Companies House, yet High Street Grp Ltd’s last accounts (30 December 2016) were filed under the small company regime. This means the accounts did not have to be audited or display a profit and loss statement.
How secure is the investment?
These investments are unregulated corporate loans and if High Street Group defaults you risk losing up to 100% of your money.
Investors’ money is secured against the assets of the group – specifically a “debenture over High Street Commercial Finance Limited” (one of HSG’s subsidiaries) “along with a Corporate Guarantee from the group of companies”.
Before relying on this security, it is essential that investors undertake professional due diligence to ensure that in the event of a default, that their charge against the group’s assets is properly recorded, and that the security is valuable and liquid enough to raise sufficient money to compensate investors.
Should I invest with the High Street Group?
As with any unregulated 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 a 100% loss of their money.
Any investment offering 11.66% per annum yields should be considered very high risk (i.e. higher risk than a diversified portfolio of stock market funds).
This particular bond is described as asset-backed. Before relying on the security backing the bond, investors should undertake professional due diligence to ensure that a) the security exists b) in the event of default, the security could be easily sold and would raise enough money to compensate all the investors c) their charge over the security will be properly and legally recorded.
Before investing investors should ask themselves:
- How would I feel if the investment defaulted, the sale of the security failed to raise enough money to compensate all investors, 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?
If you are looking for “security”, you should not invest in unregulated products with a risk of 100% capital loss.