Eddie Hobbs new Brendan Investments vehicle

[MugsGame]

I'm looking into the team a bit further at the moment. I'm trying to be balanced and not swayed by unsupported opinion to be frank.

Refer, is the hearsay I've quoted below just your unsupported opinion? Where can I as an unsophisticated member of the public get the inside track that you seem to have on BI? Are you a groupie on the BI roadshow or something?

The TV ad is unchanged but looks like this is changing too.

It seems that it was pressure from Life Offices on IFSRA was the driver.

the 2007 report has been on the advertised Brendan website since the start and it is the case that attaching it formally to the Prospectus could not have been done... the ISE took over a year to process an application...

The prospectus can't be altered without the regulators approval and, certainly based on my experience they are very slow on just about everything... It is within the wit of BI to issue an updated prospectus though with the 07 research and separately to publish info on target properties which I suspect will happen.

 

[Duke of Marmalade]

I would be cautious in suggesting that its promoters are profiteering or its investors misguided.

That would be an extremely cautious statement especially regards the investors.

More racy:

"the investors are like sheep" (Shane Ross)

or better still:

... like poor innocents dancing behind their "Pied Piper" .(Niall Brady).

BTW wasn't the Pied Piper in Germany, is this a huge leg pull after all?

 

[Brendan Burgess]

As this thread is getting longer and longer, I would like to remind readers of the following:

(a) The only people posting repeatedly and enthusiastically in favour of Brendan Investments are newly-registered users Mantus, Refer, converse2007, Riddler and Vanuatu.
(b) They all seem to have detailed knowledge of Brendan Investments, beyond that available to the general public. They have consistently dismissed, fudged or ignored any criticisms levelled at the product itself or the manner of its promotion. They all deny any association with Brendan Investments and some of them accuse other posters of having a vested interest in talking it down and/or of defaming Eddie Hobbs in some way.

 

[Duke of Marmalade]

The only people posting in favour of Brendan Investments are newly-registered users Mantus, Refer, converse2007, Riddler and Vanuatu.

Boss, very sympathetic with the thrust of this post. But is it entirely accurate? Fergie who started this thread and, like yourself, does not have the cover of anonymity has stated (somewhere in the press I think) that BI has a role in a diversified portfolio.

I briefly went through that phase as well (but have since reverted to mainstream negativity). I wonder is Fergie still of that view. I'm honestly interested as I respect his independence and experience, as do many journos.

 

[Brendan Burgess]

I must say that I interpreted "has a role in a diversified portfolio" as a euphemism for "avoid". However, I might be wrong.

I have edited the post slightly so that it is correct.

Brendan

 

[Duke of Marmalade]

Fergie? Tell us straight. I'm a straight talking gal, I don't appreciate euphemisms, sorry.

 

[Dman]

Hi Folks,
I'm still one of the undecided when it comes to this product. Intitial I was 100% going to invest as I was looking for something different to invest in as I have a few bob just sitting in a Credit Union account doing nothing.

But as the weeks have past and all the 'experts' don't seem to be too keen on this product at all.
However an important point for me is how much are they going to raise? Are they going to raise 50m or as Shane Ross says it's only going to be 10M from Joe public.

Is there any way for me to find out how much they have currently raised before I invest? I've tired emailing and ringing via the contact details on the site, but no joy with either.
Anyone else know of a way of finiding out??
Thanks

 

[gonk]

But as the weeks have past and all the 'experts' don't seem to be too keen on this product at all.

I think it is telling that there is a section headed "Press" on the BI website, where presumably it was intended to post copies of the good reviews the product was expected to receive. Instead there's an attempted rebuttal by Vincent Regan, MD of Brendan Investments, of the criticisms that have been raised in the press. Many of the points he makes are, to put it mildly, debatable. For example, here are two comments he makes:

"Investors in Brendan Investments are not levied any entry fees or other up front charges on their initial investment."

"There are costs in establishing Brendan Investments and bringing its offering to the market. However, these costs are capped at 750,000"

Call it an entry fee, up front charge or cost - the fact remains that €750k will be deducted from investors' funds at the outset. In my opinion, Mr Regan is splitting hairs. It is also notable that Mr Regan does not refer at all to the final performance fee of 20% of gains over 8% p.a. which has also been heavily criticised as excessive (not least by me!)

Shortly after the launch they did reproduce on the website an Evening Herald article in which Hobbs was quoted as saying he could quadruple investors' money. This attracted criticism from other papers and it was subsequently removed. Other than this article, any other press coverage I have seen has been at best lukewarm about the investment - much has been negative.

However an important point for me is how much are they going to raise? Are they going to raise 50m or as Shane Ross says it's only going to be 10M from Joe public.

If BI won't tell you, I don't know how else you could find out. In fairness, I don't know how Ross could find out either, so that €10m figure he gave seems to me to be mere speculation on his part. Also, even if BI gave you figures at this stage, they could be misleading. It's quite possible a lot of people are considering their positions and won't make a final decision until just before the 31 October deadline.

Check the prospectus. It says - I think - the intention is to raise anywhere between €10m and €250m. Your guess is as good as mine as to the final amount they will actually raise. (This means the costs mentioned above amount to an effective entry fee of anywhere between 0.3% and 7.5%. If they raise the €50m targetted in the prospectus, it will be 1.5%.)

 

[IFT]

edit...

 

[Gomahawk]

Brendan queries posts but removes my post in GREAT DEBATES in connection with his difficulties with IFSRA. Is it because Brendan's extreme views as expressed in his book like telling investors to avoid property as an investment altogether and put 100% of your cash into the top 10 ISEQ stocks, or his fixation on absolute costs which saw him tell investors to go 100% into the defunct Equitable Life, has finally worn out IFSRA's patience?

Brendan appears to hate property as an investment, its as simple as that. This is a common intolerence shown by people who've never invested abroad and who are enamoured with shares. Brendan believes in the dogma of the super consumer, expecting everybody to attain his level of insight. He castigates commission-paid advice and believes we should all pay fees. He is an extremist. He thinks the BI costs are too high but provides flawed analysis to support it. He ignores or downgrades opposing views. He ignores the higher operating expenses of quoted plc's such as CLS Holdings in the UK with a 1.75% annual charge on gross assets for an equivalent size business ie €1bn. Brendan argues a dogma.

Shane Ross was clearly irked by the destruction of his initial article by Hobbs on the radio. Last week he focused on costs which is a joke given his directorship of hedge funds with substantially higher costs, with leveraging and with derivatives that he castigates in his column. He is not credible.

The BI helpline is working, as is the website and contrary to the thrust of the criticism here many commentators have been positive albeit labelling the syndicate as medium to high risk.

 

[ubiquitous]

Brendan queries posts but removes my post in GREAT DEBATES in connection with his difficulties with IFSRA.

not true...
http://www.askaboutmoney.com/showthread.php?t=65277

Otherwise, please refrain from personal attacks on other posters, as per the posting guidelines.

You might please also note the following

Brendan is one of the few people who posts in his own name on Askaboutmoney. That should be respected. I know he does not discuss Consumer Panel business in public other than when they issue their annual report.

I don't think it's appropriate to use AAM to ask him to comment on something which he is clearly not prepared to discuss in public.

 

[Gomahawk]

It would be intolerable for the chairman to discuss the Panel's business in public as it would be for Brendan to use his position as chairman to go on solo runs with IFSRA pursuing his own agenda.

 

[gonk]

He thinks the BI costs are too high but provides flawed analysis to support it. He ignores or downgrades opposing views. He ignores the higher operating expenses of quoted plc's such as CLS Holdings in the UK with a 1.75% annual charge on gross assets for an equivalent size business ie €1bn.

The above comparison with CLS Holdings is equally flawed. Firstly, CLS has no equivalent to Brendan Investment's final performance fee and secondly, CLS Holdings is, as you point out, a quoted plc, meaning investors can sell their shares at any time and are not tied in for up to 10 years.

 

[Gomahawk]

Wrong. The charge of 1.75% pa is 75% more than BI and is yearly. The BI performance bonus is at the back end and requires a hurdle of 8% pa. The CLS 0.75% is purely admin and there is likely to be additional mgt costs. Typically there will be share options and / or bonuses for performance. It would be most unusual if the mgt team was not incentivised.

Life offices have briefed staff that BI is good value. It is seen as a threat to existing players and has triggered an intensive campaign of lobbying media. It has spilled over here too with pure rejectionism from several industry posters.

BI is on the way to a big success and is breaking the mould an event that is never welcomed by the status quo here. Its charges, its strategy, its team have stood up. It will have a grey market for shares after its first trading period much like Airtricity through Davys. No matter hard you try to demolish BI's proposition it will bounce back.

 

[ClubMan]

Oh gawd - not yet another cheerleader for BI or is it the same one registering over and over again...

 

[gonk]

The BI performance bonus is at the back end and requires a hurdle of 8% pa.

So what? It'll still come out of the investors' returns and if BI's management can't get a return in excess of 8% p.a. on this type of investment, they have no business being involved in it in the first place. The hurdle of 8% is extremely undemanding and the bonus rate of 20% is excessive.

It would be most unusual if the mgt team was not incentivised.

I don't have any problem with that in principle. I do say the proposed bonus structure will begin rewarding BI's management at what would be at best mediocre levels of return and at a very high rate into the bargain. No other geared property investment on the Irish market has a bonus structure which rewards managers so well.

And I think it's worth pointing out again, the bonus is paid not to the fund managers but to the owners of the "Founder Shares". At present, these are one and the same, but there is nothing to stop the owners of these shares withdrawing from active participation in the company and yet still receive any final bonus which falls due.

It will have a grey market for shares after its first trading period much like Airtricity through Davys.

The prosectus and brochure say there may be a grey market. This is by no means guaranteed and would in any case not be as liquid as a full listing on the stock exchange.

 

[LDFerguson]

Fergie? Tell us straight. I'm a straight talking gal, I don't appreciate euphemisms, sorry.

Gee Harchibald, you're bringing me back - I haven't been known as Fergie since I was at school and that was back in the days of hedge schools...it makes a refreshing change from everyone calling me "Sir" or "Your Lordship".

I genuinely started this thread five weeks ago with an open mind. I believed then and I believe now that European Commercial Property has a place in a diversified portfolio. And that's not a euphemism, Brendan. If I'm constructing a portfolio today for a client with a long-term view, European Commercial Property will be in there in my recommendations.

That said, I've gone off BI since this thread started, driven in part but not entirely by some of the analysis in this thread and elsewhere. I'm not going to rehash the arguments already made. But a quick (and not exhaustive) sample would include (1) the fact that the property pickers detail their involvement in the property business on the website and brochure, but apparently only tell prospects of their track record of making money on such projects at the roadshows. Why? (2) The fact that there's such a wide range of possible fund sizes (between €200M and €1B) could potentially leave a small team scrambling around trying to find good properties while the investors' money lies in cash, (3) Notwithstanding (2), apparently there is a pipeline of properties already going under the ruler, but apparently you only get details of this at the roadshows also. Why?

In general, I also dislike that a high-risk investment is being heavily mass-marketed with no financial advice and a low entry threshold of €5,000.

Here's a few other random comments: -

• The charges on the investment are undeniably hefty and the threshold for payment of bonuses low. So a geared property investment vehicle has chunky charges? Not news. But Eddie Hobbs promoting an investment with substantial charges is news given that he himself very publically advocated low charges in the past. I'm reminded of when it was revealed that Chris De Burgh had been getting jiggy with his nanny. The fact that a musician had been unfaithful to his wife wasn't exactly new. But the fact that it was Chris De Burgh who previously had been regaling all and sundry about how delicious his wife was that he simply had to inflict the song Lady in Red on the world - that was the story.
• The promoters stand to make big money if BI succeeds to raise enough funds to get of the ground. They'll make even bigger money if it does well. That's free trade. They have not been dishonest about it. If you don't like it, don't invest or go and set up your own fund.
• I'm long enough in this business and have seen plenty of new initiatives arrive on the scene over the years. Some have succeeded, some have failed. My point is that I personally am not remotely threatened by the appearance of BI, in case anyone thought my opinions might be coloured by self-interest.
• There have been lots of posts in this thread from anonymous posters. Some of them may have agendas, some may be simply interested. Those in the financial services industry are easy to spot. But there's only one poster who, from reading his/her posts, I strongly suspect has a connection with BI, but who attempts to claim that they're just a consumer. I can't prove this suspicion. I'm not going to bother to try. But if I'm right, I'll say this to the person concerned (you know who you are) - if you have to resort to such pathetic efforts to support your arguments, you must be desperate.

 

[LDFerguson]

Life offices have briefed staff that BI is good value. It is seen as a threat to existing players and has triggered an intensive campaign of lobbying media.

BI is on the way to a big success and is breaking the mould an event that is never welcomed by the status quo here. Its charges, its strategy, its team have stood up.

Don't ya just love unsubstantiated rumour-mongering on an internet board?

Oh what the hell - I might as well join in. I hear from well-placed industry sources that Brendan Burgess, Michael Fingleton and Lord Lucan have joined forces and are mounting a take-over bid for Irish Nationwide, EBS and Royal Liver. Senior management at AIB are concerned, I'm told - this is going to shake up the industry.

 

[Sunny]

I hear from well-placed industry sources that Brendan Burgess, Michael Fingleton and Lord Lucan have joined forces and are mounting a take-over bid for Irish Nationwide, EBS and Royal Liver. Senior management at AIB are concerned, I'm told - this is going to shake up the industry.

I heard that as well.

 

[Duke of Marmalade]

Its charges...have stood up.

You bet.

As to this grey market - they will regret that promise - it will bring the chickens home to roost v. quickly.

This one is not goin' to go away. Rattling the Senator's cage was also a bad mistake. I guess the Senator will be watching this grey market very closely indeed.

Thanks Sir Fergie for responding to me. BTW the range is 40M to 1BN. Far, far too wide for the promoters to argue that they are equally prepared for any scenario.