Eddie Hobbs new Brendan Investments vehicle

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Sunny

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In newsletter on website, here is position;

The Directors confirm that the maximum deductions from all equity raised will be 1.5% representing the maximum capped set up costs at €750k as stated in the Prospectus for total equity raised of €50 million. For higher equity raised eg €100 million the effect of the cap is to drop this to 0.75%. For equity raised less than €50 million the set up costs will not be more than 1.5%. Therefore if you invest €10,000 the maximum deducted is €150 and will be lower if the total equity raised is over €50 million. This is used to cover all set up costs and professional fees. None of this money is paid to the Directors.
Interesting that they do say that in a newsletter but that is not what it says in the official prospectus (unless they have changed it or I am incorrect). How do they justify it though. Surely the start up costs of the fund such as advertising, legal, professional fees etc are the same whether they raise 10m or 50m so if they raise €10m, the costs will still be €750,000 or am I missing something?
 

Duke of Marmalade

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Maybe a bit early for post mortems but let's presume it has been a flop.

With hindsight we can see that BI was attempting the nigh imposible, to sell a retail investment product (a risky and long term one at that) without any distribution or client base.

It was relying solely on the huge marketing appeal of Mr Hobbs to make this, uniquely, an investment product that would be bought without having to be sold.

Whilst the marketing effort was impressive, nobody who read any of Ross' articles or, to a lesser extent, Brady's, would touch it with a 40 foot pole.
 

Wollie

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"Brendan Investments pan European Property plc today (Wednesday) extended its deadline for investment from 31st October to 30th November due to high levels of demand from both public and pension investors, and to tie in with the November pension deadline."
The reference to pension investors and the November deadline is rubbish. What pension investor in his or her right mind would invest in a company that is subject to tax on income and CGT on realised gains, with no chance of recovering those taxes?
 

Brendan Burgess

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Actually, the vast majority of pension funds! They invest most of their money in companies which pay Corporation Tax.

Brendan
 

Duke of Marmalade

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An interesting observation Boss. The fact remains that if a pension fund invests directly in property it is spared these taxes. Back to the argument that this plc is less tax efficient than pension/life products investing directly.
 
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MMilken

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A self-administered pension scheme could invest in this 'Brendan' company on the usual pension 'tax-efficient' terms.

Not that I would recommend them to of course :)
 

Dave Vanian

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I see on BI's website, there's a link on the left side of the Home Page "For information on investing with your pension, please contact our pension advisor." When you click the link it brings you to the website of a Cork-based company called Corporate Life.

But I can't see any details on CL's website of who they are or who they are regulated by.
 

ClubMan

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Register of Investment Product Intermediaries (Section 31 Register) as at end Oct 2007 (955.20 KB PDF)
Number
36332

Legal Name
Jamesmont Limited

Trading Name
Corporate Life

Address
Corporate House
15 South Mall
Cork

Product Producers
Bloxham, Caledonian Life, Canada Life Assurance (Ireland)
Limited, Eagle Star Life Assurance Company of Ireland Limited,
Friends First Life Assurance Company Limited, Hibernian Life &
Pensions Limited, New Ireland Assurance Company plc, Standard
Life Assurance Company, Irish Life Assurance Plc

Status
Multi-Agency Intermediary
 

Sherpa

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Anyone got easy access to the CRO website to see who the Directors of Jamesmont Ltd are?
 

Sherpa

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A self-administered pension scheme could invest in this 'Brendan' company on the usual pension 'tax-efficient' terms.
Yes, but not as tax-efficiently as a direct investment in property through a pension scheme.
 
M

MMilken

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Just as tax-effeciently as most pension schemes that invest in a fund consisting of quoted companies.

Bendan property is akin to a fund, not to one direct property.

I am not a fan - but your comparison is invalid.
 

ubiquitous

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Anyone got easy access to the CRO website to see who the Directors of Jamesmont Ltd are?
Company Name: JAMESMONT LIMITED
Registered Number: 386501
Company Type: PRIVATE LIMITED BY SHARES
Incorporated: 24/05/2004
Company Status: NORMAL

Share Cap. Currency: EURO CURRENCY UNIT
Authorised Capital: 250,000

Next Annual Return Date: 24/05/2008
Last AR Filed: 24/05/2007
Last Accounts To Date: 31/12/2006

Registered Address: 15, SOUTHMALL,
4TH FLOOR,
CORK.

View Other Companies At This Address? NEW!


Principal NACE Code: 65.23 OTHER FINANCIAL INTERMEDIATION N.E.C.
Previous Names:
JAMESMOUNT LIMITED

Businesses Owned By This Company? NEW!

Directors and Secretary - as per C.R.O. at 02/11/2007
Directors Special Note
Please note that the information displayed on this printout as to the particulars of the directors and secretary of this company may not be complete or up to date, as there may be unregistered documents which affect the position. Please refer to the list of Documents below, and if necessary, consult the company file or images for full, up-to-date particulars as to the company's officers. If this printout is blank as to officer details, please consult the images of the registered New Company documents.

Name: CLARE CLEHANE Other Directorships?
Title: DIRECTOR
Address: 7 Jamesmont,
Rochestown
Cork


Date of Birth: 26/09/1973


Name: DAVID JOHN CLEHANE Other Directorships?
Title: DIRECTOR
Address: 7 Jamesmont,
Rochestown,
Cork


Date of Birth: 28/06/1968


Name: DAVID JOHN CLEHANE Other Directorships?
Title: COMPANY SECRETARY
Address: 7 Jamesmont,
Rochestown,
Cork


Date of Birth: 28/06/1968
 

Duke of Marmalade

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Just as tax-effeciently as most pension schemes that invest in a fund consisting of quoted companies.

Brendan property is akin to a fund, not to one direct property.

I am not a fan - but your comparison is invalid.
MMilken, I think it is your comparison which is invalid. There is no question of a pension policy/fund directly going into the cement business, say, rather than investing in CRH. Brendan is a property manager and is taxed in that capacity. The same property management could be done under a pensions policy without the intervening share structure and these taxes would be avoided.
 
M

MMilken

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What a ridiculous thing to say.

Brendan PLC will be taxed in the exact same way that other property companies (such as REITs would be taxed) - many people use their pension funds to gain tax-efficient access to a REIT, do they not?

Many pension schemes invest in quoted companies - do they not?

Just because the company is taxable does not mean the tax-efficiency of accessing it through a pension is lost.
 

Sherpa

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Just because the company is taxable does not mean the tax-efficiency of accessing it through a pension is lost.
Agreed. But the point I am making (and Harchibald too) is that it would be possible to get even more tax efficiency by investing directly in geared property thorugh a pension fund.
 
M

MMilken

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I am making the point that many investors invest in other PLCs through their pension fund, I do not think one can categorically say this is a bad investment for pension investors on tax terms - most pension equity funds would invest in similarly taxable entities.

I am not disputing that it may be an awful investment in general.
 

Duke of Marmalade

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Let's try putting it this way. A plc is subject to two types of taxes, internal on the activities of the plc and external on the gains/divies received by the investor.

For plc's in ordinary industrial activity a pension fund/policy is not capable of performing that activity (not least for regulatory reasons) and so has no choice but to use the plc, thus inevitably suffering the internal taxes. It is of course exempt from the external taxes.

For a plc which is nothing more than a fund manager itself, that's the very activity that pension funds are meant to be able to do themselves and if they do do it themselves, both the internal taxes and the external taxes are avoided.

However, I do agree that many pension funds do invest in these plc funds, possibly because they don't have the critical mass or even know-how to go it alone.

BTW under the old tax system of ACT credits, pension funds did actually enjoy a rebate of internal corporation tax at least, though not of other internal taxes.
 
M

MMilken

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It is a PLC - that's my point, many pension fund investors invest in PLCs...now whether or not this is a good PLC is another matter.
 

Brendan Burgess

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Hi Milken

You are missing the point that Harchibald is making.

If a pension fund buys properties directly, they will pay no income tax or CGT.

If a pension fund invests in BI, BI will pay income tax and CGT and the pension fund will not be able to reclaim it.

Of course, if a pension fund invests in other Plcs, they will pay income tax and CGT as well.

So if you have a self administered pension fund and you want to allocate part of it to property, you should buy property directly or buy a pension fund. But you should not buy a plc to invest in property.

Question. If an Irish pension fund invests in English and German property, presumably it pays English and German taxes and can't claim them back. So would that eliminate the advantage of a fund status over a plc status?

Brendan
 
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