Eddie Hobbs new Brendan Investments vehicle

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Brendan Burgess

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So what are the implications of this small amount for the cost structure of the fund? Does it not put the initial costs up very high as they will be spread over only €13m?

Brendan
 

Duke of Marmalade

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Eddie stated in his Sindo "right of reply" that the initial costs debited to the fund would be capped at 1.5%, that's about 200K. But the costs will in fact have been at least 750K as per prospectus, leaving the lads over 500K behind.

I am not an expert but does 50M represent critical mass? We are told property selection/development/management is very expensive. Is 500K management charge enough? It must certainly reduce the scope for diversification.

Several reasons were cited for the "flop" but surely the most convincing is that an attempt was made to bypass the intermediary market. People just don't buy 10 year investments on impulse, even if promoted on a very highy profile.
 

Brendan Burgess

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Is the Sindo article legally binding on them?

Did the prospectus mention a cap?

It's hard to know why it flopped. I think that most of us look to Eddie as a campaigner and entertainer. We don't like it when he moves to the other side and starts selling investments to us on which he stood to make lots of money for himself.

We might not like financial institutions, but I am told that Irish Life has quietly raised €100m in an overseas property fund lately. We don't like them, but we tend to trust them more than a group of individuals.

Brendan
 

F. Kruger

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We don't like them, but we tend to trust them more than a group of individuals.
I think that it is more down to the type of service. You can't really compare an 'Advisory' Service and an 'Execution Only' Service, which is what you are doing in the above example.

It has nothing whatsoever to do with personalities but rather whether the target market was is ready for this type of investment. Timing would also have played its part.
 

Duke of Marmalade

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Is the Sindo article legally binding on them?

Did the prospectus mention a cap?

Brendan
Good questions Boss. As I have already observed, this volunteered concession will cost the promoters a cool 500K. It was conceded late on when it must have been obvious to them that no way would they meet their 50M target.

Let's watch their accounts very closely to see that indeed only 200K was charged for set up costs.
 

ClubMan

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From this mornings fxcentre site...
Brendan Investments, the property fund set up by broadcaster and finance guru, Eddie Hobbs, has raised just E13m - far short of the E250m he had hoped to raise.
EH was just on Newstalk's Down To Business and mentioned "raising a little over €13M".
 

TSThomas

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€13M versus €250M? Sounds like they were aiming for the Sun & crashed into the Moon instead.
 

ClubMan

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The €13M is what they collected directly and will be multiplied several times (EH mentioned up to 3 times I think) through gearing/additional borrowing. Not sure if €250M represents a target for what they wanted to collect directly or the geared amount?
 
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mercman

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Extopia. That seems the best idea I have heard of. The reason why this has flopped is two fold. Firstly sentiment in property to the ordinary man has gone - simple as that. The days of making a fast buck in property are over. It will take time, effort, expertise and luck from here on in for the next five years. Secondly, some of the team behind this venture have been riding on the crest of a wave. The wave is beginning to wobble. Hand back the money men and then you can hold your heads up high.
 
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mercman

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This looks like one that will be interesting to watch. I bet the Promoters aren't sweating and that their fees will be paid. Another course of complete disregard for Investor funds. Will bed interesting to see if Banks will support this as they have dropped from 250 million to a derisory figure. I do believe that if theinvestors form a Group, they will be able to shame the project into refunding those Investors that want their money back.
 
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