I do remember the moniker but read Brendans comments here
http://www.askaboutmoney.com/showpost.php?p=492470&postcount=191
http://www.askaboutmoney.com/showpost.php?p=492470&postcount=191
Eddie Hobbs new Brendan Investments vehicle
- Thread starter LDFerguson
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Refer
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Don't think the Riddler guess is accurate - see my earlier post.
Duke of Marmalade
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I'm not great at links but I am aware that this geared thing did come under specific scrutiny. The issue was not so much about expenses but about using 8% gross return and say 4% borrowing to generate chain letter net returns. This was very definitely banned and it was made clear that the returns were on net assets and before expenses. There was never any issue with expenses, these had to be shown explicitly so 1% AMC would be quite clearly 4% on a 4 times gearing, similarly the RIY would be 4%+.
Mithrandir and Gandolf and Mantus for that matter would be well aware of all this.
Duke of Marmalade
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Krugie baby, the RIY is 3.02% on the net assets. If the Brendan approach was used this would be equivalent to 1.0067% on the gross assets before gearing.
BTW this disclosure seems to go above and beyond the call of duty. I thought the costs of buying and selling, including stamp duty, did not have to form part of the charges disclosure and RIY. Sure you got this right?
BTW this disclosure seems to go above and beyond the call of duty. I thought the costs of buying and selling, including stamp duty, did not have to form part of the charges disclosure and RIY. Sure you got this right?
M
Mantus
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You are clutching at straws. The disclosure requirements do not penetrate all the charges that the Unit Linked fund does not directly bear. The comparison as I've said is inaccurate especially when underlying Unit Trusts are used to conceal charges. Check it out.
1. If you want to compare BI use quoted Property PLC's where you'll find mgt costs @ 1% to 2% of Gross Assets. Go ask an analyst to run the numbers.
2. The nearest "products" are hedge funds. Look at Friends First Insight Currency Fund wrapping the Alder Capital currency model. See the incentive scheme.
3. Check out Bank of Ireland Newgrange Fund. This isn't even a hedge fund. It is a unit trust investing in a contrarian mix of equities. The commission is 3%. The annual charge is 1.5% pa. The incentive bonus is 20% above a hurdle rate of 7% pa, yep 7% pa.
Brendan Investments is reasonably priced. You are desperately trying to undermine the offer. What does it take for you to accept that you are wrong in your approach annd, perhaps, motive?
1. If you want to compare BI use quoted Property PLC's where you'll find mgt costs @ 1% to 2% of Gross Assets. Go ask an analyst to run the numbers.
2. The nearest "products" are hedge funds. Look at Friends First Insight Currency Fund wrapping the Alder Capital currency model. See the incentive scheme.
3. Check out Bank of Ireland Newgrange Fund. This isn't even a hedge fund. It is a unit trust investing in a contrarian mix of equities. The commission is 3%. The annual charge is 1.5% pa. The incentive bonus is 20% above a hurdle rate of 7% pa, yep 7% pa.
Brendan Investments is reasonably priced. You are desperately trying to undermine the offer. What does it take for you to accept that you are wrong in your approach annd, perhaps, motive?
Duke of Marmalade
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Mantus, I was replying to Kruger's request for clarification. My post was purely factual, I didn't even refer to BI, nothing I said in that post was in any way tendentious. Why do you react by accusing me of "clutching at straws" and being "wrong in my motives"?
BTW SoA guidance specifically requires that costs in underlying collectives should be part of the disclosure. Believe me there are no tricks, that is the beauty of the SoA involvement - any tricks would be quickly spotted and stamped out.
I have already accepted that Brendan is probably not out of line with its peers on charges/costs, my complaint is that these are not being communicated to the target audience in the same transparency that EH so successfully lobbied to get imposed on the life industry, quite correctly in my view.
BTW SoA guidance specifically requires that costs in underlying collectives should be part of the disclosure. Believe me there are no tricks, that is the beauty of the SoA involvement - any tricks would be quickly spotted and stamped out.
I have already accepted that Brendan is probably not out of line with its peers on charges/costs, my complaint is that these are not being communicated to the target audience in the same transparency that EH so successfully lobbied to get imposed on the life industry, quite correctly in my view.
G
gonk
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No, the nearest products are other geared property investments. The above products are not remotely comparable. Once again, what other geared property fund, of any kind, has a performance fee of 20% of gains over 8% p.a.? (The question is purely rhetorical, you understand. It has been put to you and ignored by you so many times that obviously Brendan's performance fee is the highest you know of for a geared property fund.)
Brendan Investments' performance fee is extortionate and quoting an even more extortionate fee on a completely different investment class doesn't alter that fact.
M
Mantus
Guest
Sorry Archibald I accept your argument fully. It would be nice if the SOA regs covered UCITS, OEICS and PLC's but they don't because unlike Life Products these don't give illustrations of the future AND don't have the appalling track record of the Life Industry which the SOA left run rampant until the IIF Agreement was separately collapsed with zero help from the SOA. Since this enforced change the SOA has behaved impeccably I accept.
BI is subject to independent audit of its activities with a PWC report sent annually to its shareholders, so while it is not bound by the disclosure regs and doesn't engage in illustrations of future benefits, it has to contend with the dicipline of being a PLC - would you accept that is a benefit preferable to the murky middleground of non-life insurance and non-plc syndicates who are not bound by the EU Prospectus Directive?
It makes no sense going through 1.5 years of regulation by the ISE and IFSRA if the resulting Prospectus is of no worth to investors?
GONK; A geared structure is a geared structure. I have given plenty of appropriate examples, Quoted PLC's, Hedge Funds and even a retail Life fund, HLA European Residential Fund. BI is reasonable by these comparators, you however seem determined to repeat your failed mantra.
BI is subject to independent audit of its activities with a PWC report sent annually to its shareholders, so while it is not bound by the disclosure regs and doesn't engage in illustrations of future benefits, it has to contend with the dicipline of being a PLC - would you accept that is a benefit preferable to the murky middleground of non-life insurance and non-plc syndicates who are not bound by the EU Prospectus Directive?
It makes no sense going through 1.5 years of regulation by the ISE and IFSRA if the resulting Prospectus is of no worth to investors?
GONK; A geared structure is a geared structure. I have given plenty of appropriate examples, Quoted PLC's, Hedge Funds and even a retail Life fund, HLA European Residential Fund. BI is reasonable by these comparators, you however seem determined to repeat your failed mantra.
Duke of Marmalade
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Mantus, I think that the prospectus is a very professional document. I am sure that Brendan will be completely compliant with that prospectus. But for the target audience, the brochure is meant to communicate these matters in plain english. The brochure IMHO falls far short of the standards promulgated so forcefully by the promoter Himself.
M
McVittie
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This thread is in danger of becoming so technically archane as to be useless to the average investor.
Plain unadorned english (without the rhetoric) should suffice.
As I read it BI cannot use illustrations. Where used elsewhere illustrations are illusional as they may hide as much as they declare.
Perhaps it would be help everyone viewing this thread if an opinionated summary of the apparent underlying motives of major posters was set out:
Mantus: Clearly believes that BI is a vehicle that investors should consider and has analysed the offering and found it a fair deal. Motive: persuasion through professional insight and analysis ?
Gonk: Has problems with the scheme. Has vigoroulsy defended competing offering elsewhere on this site.Motive to make a preferred competitor offering look better?
Harchibald: Insider/producer mindset basis of arguments rooted within current producer product set. Opened a second thread to question promoters motives. Motive: Undermine BI and its promoters as seen as threat to status quo ? Probable underlying Rossarian theology.
These are of course my opinion only.
Please ignore the double posting below.
Plain unadorned english (without the rhetoric) should suffice.
As I read it BI cannot use illustrations. Where used elsewhere illustrations are illusional as they may hide as much as they declare.
Perhaps it would be help everyone viewing this thread if an opinionated summary of the apparent underlying motives of major posters was set out:
Mantus: Clearly believes that BI is a vehicle that investors should consider and has analysed the offering and found it a fair deal. Motive: persuasion through professional insight and analysis ?
Gonk: Has problems with the scheme. Has vigoroulsy defended competing offering elsewhere on this site.Motive to make a preferred competitor offering look better?
Harchibald: Insider/producer mindset basis of arguments rooted within current producer product set. Opened a second thread to question promoters motives. Motive: Undermine BI and its promoters as seen as threat to status quo ? Probable underlying Rossarian theology.
These are of course my opinion only.
Please ignore the double posting below.
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LDFerguson
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Okay converse - they're your opinions. Here are mine: -
Mantus - so obviously connected with BI that it hardly warrants writing about.
Gonk - has repeatedly stated that s/he has no connection with Augusta which I presume is the competing product you mention. I choose to believe him/her. I respect everyone's right to anonymity on Askaboutmoney but I would hope that no adult posting here would blatantly tell lies about their connections or lack of them in a sad attempt to further their own arguments. That would just be pathetic. I don't believe Gonk has engaged in such practices.
But again - these are my opinions only.
Mantus - so obviously connected with BI that it hardly warrants writing about.
Gonk - has repeatedly stated that s/he has no connection with Augusta which I presume is the competing product you mention. I choose to believe him/her. I respect everyone's right to anonymity on Askaboutmoney but I would hope that no adult posting here would blatantly tell lies about their connections or lack of them in a sad attempt to further their own arguments. That would just be pathetic. I don't believe Gonk has engaged in such practices.
But again - these are my opinions only.
Brendan Burgess
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Here is an interesting press statement issued by the Society of Actuaries in February last.
THE SOCIETY OF ACTUARIES IN IRELAND
Press Release
08 February 2007
President of Society of Actuaries warns against risks of unregulated property investments
“In the past few years, Irish investors have enjoyed good investment returns with low levels of risk. But risk is never far away and when it returns, as it definitely will, it will expose the weak underbelly of the economy and lay bare practices that have evolved in the good times that will not be able to stand up to the stress of turbulent market conditions.”
This was stated today (Thursday, Feb 8th) by Colm Fagan,
President of the Society of Actuaries in Ireland at the Society’s biennial dinner.
Mr Fagan particularly drew attention to Irish investors’ high concentration of investment in property, both through individual property ownership and collective vehicles. “The average Irish investor has a much greater exposure to property assets of various kinds than investors in most other countries. This lack of diversification, often geared up through high levels of borrowing, carries risks which the strong returns of recent years have probably masked.”
“Of particular concern would be individual buy-to-let investments, often overseas, which are completely unregulated and are not subject to the normal statutory protections afforded to retail investors in regulated products. For example, investors do not benefit from full disclosure of charges and sales remuneration applying to most retail regulated products. In addition, some of the claims made for future performance of these investments are very misleading, and the commission paid to the salesperson or intermediary, which does not have to be disclosed, can be particularly high.”
Mr Fagan also cautioned about the risks of certain collective property investments. “It can be difficult for the consumer to spot that some investments are unregulated, given that they may be promoted by entities - such as banks, life assurance companies or financial advisors- that are regulated in respect of other activities. In other cases, the
unregulated property fund may be ‘wrapped’ inside a regulated product, such as a life assurance policy or a pension. While both the ‘wrapper’ and promoter may be regulated, the underlying property investment is often held in an unregulated vehicle such as exempt unit trusts, shares in private companies or co-ownership arrangements. This can lead to risks that most investors are unaware of, including potential problems in realising the investment, transparency on costs and valuations.
Added to this virtually all consumers invest on a substantially geared basis, often in just one particular property located in a foreign jurisdiction.”
Mr Fagan repeated the Society of Actuaries’ call for property investment schemes to be brought within the remit of the Financial Regulator.
THE SOCIETY OF ACTUARIES IN IRELAND
Press Release
08 February 2007
President of Society of Actuaries warns against risks of unregulated property investments
“In the past few years, Irish investors have enjoyed good investment returns with low levels of risk. But risk is never far away and when it returns, as it definitely will, it will expose the weak underbelly of the economy and lay bare practices that have evolved in the good times that will not be able to stand up to the stress of turbulent market conditions.”
This was stated today (Thursday, Feb 8th) by Colm Fagan,
President of the Society of Actuaries in Ireland at the Society’s biennial dinner.
Mr Fagan particularly drew attention to Irish investors’ high concentration of investment in property, both through individual property ownership and collective vehicles. “The average Irish investor has a much greater exposure to property assets of various kinds than investors in most other countries. This lack of diversification, often geared up through high levels of borrowing, carries risks which the strong returns of recent years have probably masked.”
“Of particular concern would be individual buy-to-let investments, often overseas, which are completely unregulated and are not subject to the normal statutory protections afforded to retail investors in regulated products. For example, investors do not benefit from full disclosure of charges and sales remuneration applying to most retail regulated products. In addition, some of the claims made for future performance of these investments are very misleading, and the commission paid to the salesperson or intermediary, which does not have to be disclosed, can be particularly high.”
Mr Fagan also cautioned about the risks of certain collective property investments. “It can be difficult for the consumer to spot that some investments are unregulated, given that they may be promoted by entities - such as banks, life assurance companies or financial advisors- that are regulated in respect of other activities. In other cases, the
unregulated property fund may be ‘wrapped’ inside a regulated product, such as a life assurance policy or a pension. While both the ‘wrapper’ and promoter may be regulated, the underlying property investment is often held in an unregulated vehicle such as exempt unit trusts, shares in private companies or co-ownership arrangements. This can lead to risks that most investors are unaware of, including potential problems in realising the investment, transparency on costs and valuations.
Added to this virtually all consumers invest on a substantially geared basis, often in just one particular property located in a foreign jurisdiction.”
Mr Fagan repeated the Society of Actuaries’ call for property investment schemes to be brought within the remit of the Financial Regulator.
M
Mantus
Guest
Thank you Brendan. This is precisely my point from the SOA.
1. Overseas buy-to-lets, unit trusts, private companies are murky and unregulated.
2. Life Offices use Unit Trust to conceal charges and wrap properties. the most common used are those of ITC and CHC called the Delta and Destiny Unit Trusts respectively. So you put your cash into a regulated Life Office and hey presto it disappears down a trap door into an unaudited and unregulated entity that has no link to IFSRA.
BI as a PLC is unregulated but its Prospectus has been regulated. It delivers the dicipline of annual audited accounts. It treats people's money as from Shareholders and what that entails ie ownership and not investors on a ride in a life wrapper, private company etc.
The statement from the SOA is precisely why the PLC route was chosen and FYI I have consistently brought the precise same subject to the attention of IFSRA and the media.
I accept that BI is not regulated but the PLC entity has superior transparency and protection including a board chair like Dermot Flanagan SC. It will be duty bound to act at the top standards expected of a PLC. If such PLC's were fully regulated by IFSRA a full application would have been sought I feel sure but BI would never have suggested going the Lifew wrapper route.
1. Overseas buy-to-lets, unit trusts, private companies are murky and unregulated.
2. Life Offices use Unit Trust to conceal charges and wrap properties. the most common used are those of ITC and CHC called the Delta and Destiny Unit Trusts respectively. So you put your cash into a regulated Life Office and hey presto it disappears down a trap door into an unaudited and unregulated entity that has no link to IFSRA.
BI as a PLC is unregulated but its Prospectus has been regulated. It delivers the dicipline of annual audited accounts. It treats people's money as from Shareholders and what that entails ie ownership and not investors on a ride in a life wrapper, private company etc.
The statement from the SOA is precisely why the PLC route was chosen and FYI I have consistently brought the precise same subject to the attention of IFSRA and the media.
I accept that BI is not regulated but the PLC entity has superior transparency and protection including a board chair like Dermot Flanagan SC. It will be duty bound to act at the top standards expected of a PLC. If such PLC's were fully regulated by IFSRA a full application would have been sought I feel sure but BI would never have suggested going the Lifew wrapper route.
G
gonk
Guest
You castigated Brendan Burgess for comparing BI with another property fund which is ungeared:
Mantus said:
If you argue that comparison of charges with an ungeared property fund is invalid, how much more invalid are your comparisons with a hedge fund investing in currencies and an ungeared equity-based fund? You're unable to come up with an example of any geared property fund which has overall charges close to BI's and the comparison with the Friends First and Bank of Ireland funds is clutching at straws.
As for my "mantra" being failed - that's your opinion. My opinion is the only failure involved is your failure to meaningfully address the question.
C
Caoilfhio
Guest
Very Naughty new Brendan Investments vehicle
I work in a Life Company that markets and sells Geared Property Funds. It is clear to me that the Brendan Product is a poor one.
For the record
- The charges are high.
- The level of gearing is very high - much higher than normal.
- The transparency of the Prospectus is poor
Indicative returns (the only numbers are where it is twice mentioned that the Brendan Fund is better placed to deliver than the 12%-16% pa target of other commercial funds) are a disgrace. My industry is correctly not allowed discuss returns on this basis.
In addition, I would only allow this level of gearing at the very top end of the market where clients would be professional investors or in receipt of professional advice.
So this Product wins my naughty prize of the month competition.
PS As Consumer Champion Eddie has a huge conflict of interest here. If he recognises the conflict, he should not have taken on the role or he should relinquish his Consumer Association role. If he does not recognise the conflict, then he should not have the Consumer Association role.
I work in a Life Company that markets and sells Geared Property Funds. It is clear to me that the Brendan Product is a poor one.
For the record
- The charges are high.
- The level of gearing is very high - much higher than normal.
- The transparency of the Prospectus is poor
Indicative returns (the only numbers are where it is twice mentioned that the Brendan Fund is better placed to deliver than the 12%-16% pa target of other commercial funds) are a disgrace. My industry is correctly not allowed discuss returns on this basis.
In addition, I would only allow this level of gearing at the very top end of the market where clients would be professional investors or in receipt of professional advice.
So this Product wins my naughty prize of the month competition.
PS As Consumer Champion Eddie has a huge conflict of interest here. If he recognises the conflict, he should not have taken on the role or he should relinquish his Consumer Association role. If he does not recognise the conflict, then he should not have the Consumer Association role.
Yellow Belly
Registered User
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All this technical jargon being discussed is fine, but can someone please answer the following for me (as a Joe Public investor):
Any opinions are welcome.
- What initially does it cost to invest €100k in this BI deal?
- Am I purchasing shares in this "plc"?
- The annual "gross asset" value charge seems rather high, surely this should be on the "net asset" value which is the REAL measure of growth of the investment?
- If this is a plc, and I am a shareholder, where do the "performance" fees go? Onto the plc's bottom line- where I may share a dividend from?
- How do I get my money back? When can I get it back?
- How does this "set up" differ from other geared property investments I have from qualified investment funds (Custom House Capital) and Hibernian Life?
Any opinions are welcome.
Duke of Marmalade
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Converse, Fergie fairly slapped you down on your categorisation of Mantus and Gonk.
I have admitted to involvement in the conventional retail investment industry, particularly on the life side. I am no fan of any of these property deals for the reasons set out by the SoA. I am not in the least bit afraid of any threat.
You might not believe it but I was a fan of Himself in the early days when he took on the life industry. Niall Brady's article sums up perfectly my feelings. With hindsight we can see all that consumer crusading as self serving publicity seeking after all. In the new role as Pied Piper every standard that was campaigned for has been ignored. In the words of Brady "consumer champion turned salesman".
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Mantus
Guest
There are a number of personal matters entering the thread but let me address. The person you refer to is not a Director of CAI. Any advisor including the one about whom refer is entitled to engineer and distribute an investment proposition much like many other firms. Consumer advocacy was done voluntarily by the same person since the early nineties. To suggest that 16 years of such work was in preparation to metamorphisise into a salesman is a the type of slur that the ST has been engaged in continuously for several years during which the ST regularly relied upon a convicted fraudster as its source. It now relies on cheap shots carrying out the orders of its editor who has publicly announced his dislike of Hobbs in 2005.
To take this down into questioning the integrity of one of its promoters is telling and, frankly, old hat.
To take this down into questioning the integrity of one of its promoters is telling and, frankly, old hat.
R
Refer
Guest
Gentlemen could we please return to the topic. I dont care who is who. Since entering Mantus has put up a convincing case for BRENDAN INVT in my opinion. To answer the questions raised, the min is 5k, you get shares, the 1% MGT FEE is on the gross assets but seems to be on the lighter side of what quoted property plcs charge, the performance fee is on the internal rate of return on maturity when cash is paid back in one lot or in strips to investors. The profit share is 80% TO SHAREHOLDERS above 8%.
The key is if you believe a leveraged return on german investment property and portugese touristic developments will perform well over the next decade and you are prepared for the risks spelt out. If not avoid this investment opportunity. If you do, this is a good diversified investment away from all our high reliance on Irish property. I see construction stocks now getting a hammering.
The key is if you believe a leveraged return on german investment property and portugese touristic developments will perform well over the next decade and you are prepared for the risks spelt out. If not avoid this investment opportunity. If you do, this is a good diversified investment away from all our high reliance on Irish property. I see construction stocks now getting a hammering.
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