Investors in Brendan Investments to lose 90% of their money?

Discussion in 'Investments' started by Brendan Burgess, Dec 1, 2016.

  1. Bronte

    Bronte Frequent Poster

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    Why does the regulator have a say on the prospectus, but not on the fund.

    I think it would be helpful on page one of such things that in big bold red print it says this is a risky product and you can lose all your investment.
     
  2. Dan Murray

    Dan Murray Frequent Poster

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    Quis custodiet ipsos custodes?

    (generally valid and especially so here!)
     
  3. Bronte

    Bronte Frequent Poster

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    My bank here called me in for an assessment as to risk because of cash I had on deposit with them.

    It's probably a state enforced obligation. It took quite a while. Anyway turns out I'm risk averse so they basically had no 'product' for me. And what they did show me, it was made clear the risks.

    Do they do that on Ireland?
     
  4. MrEarl

    MrEarl Frequent Poster

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    More than fair, thank you for the details provided Mr. Burgess.

    Sounds good to me ;)

    ... on a more serious note, clear big bold warnings about the risks would be a welcome advance (much like the consumer protection stuff). Likewise, I would like to see these type of funds forced to design their fees and income in such a manner that more of the professional and management fees are subject to the success of the fund.
     
  5. mathepac

    mathepac Frequent Poster

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    But why not work as fund managers from within the organisation making the disastrous investments? Presumably they could draw down directors' fees and other remuneration / bonuses from there without the complication and additional overhead of yet another company?
     
  6. Bronte

    Bronte Frequent Poster

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    What that not done to hide what was going on. No illegal but sneaky surely. I think all of this stuff should be in the prospectus.
     
  7. SBarrett

    SBarrett Frequent Poster

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    Banks go through deposit holders accounts to see who has a balance over a certain amount and over a certain amount of time. They then try to sell them investment products. I suspect your bank was doing the same thing.

    Steven
    www.bluewaterfp.ie
     
  8. SBarrett

    SBarrett Frequent Poster

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    a lot of investment do that and guess what...people complain about that too!

    It costs a lot of money to run a fund, especially a property fund and the investors are the ones that pay for it. All charges should be more transparent so investors know how much they are paying in charges and fees.


    Steven
    www.bluewaterfp.ie
     
  9. MrEarl

    MrEarl Frequent Poster

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    I fully appreciate that Steven, but it's rarely a breakeven type situation with the managers often very well paid for doing a "part time" job, particularly if we look at the likes of commercial property funds. As I said above, let more of the professional fees and staff rewards be subject to the ultimate success of the fund.
     
  10. Brendan Burgess

    Brendan Burgess Founder

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    Interesting interview with Eddie and Mark Paul in today's Irish Times

    http://www.irishtimes.com/business/...stments-and-the-disaster-in-detroit-1.2970926

    Hobbs admits that Bipep lost money on disastrous deals, that it misjudged the market and that its management company came close to collapse. Some co-founders now barely speak to each other.

    “I can be questioned for my judgment, no doubt about that,” he says. “But I’ll defend my integrity. I’m embarrassed by what has happened. You can see I’m annoyed I have to explain it, but I don’t engage in chicanery.”

    ...

    “We could have stayed in Germany and got nowhere. The US was the only western economy recovering,” says Hobbs.

    However, shareholders are angry that BIPM could have cleaned up at home if it had waited a while longer, as Ireland soon became rich pickings for vultures.

    ...

    The board signed off on the US foray. But, according to Hobbs, it was O’Neill and Regan who first suggested investing in Detroit property. Where did they get the idea?


    “I don’t know,” says Hobbs, insisting that the executives did all of the “investigative work and pathfinding”.

    ...

    BIPM had by then taken €2 million in fees from Bipep, but Hobbs insists he never got a penny. He showed a letter from accountants appearing to confirm this.

    ...
    Since Flanagan and Hobbs left the fund two years ago, what has happened to drive losses from 50 per cent to 90 per cent? Both men say they haven’t been told.

    ...
    Flanagan and Hobbs says they acted correctly. Hobbs regrets what happened.

    “It’s handy [for some] that I am a lightning rod,” he says. “But do I accept responsibility? Of course I do. I’m not trying to shirk it.”
     
  11. Brendan Burgess

    Brendan Burgess Founder

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    As I said in September 2007:

    Eddie Hobbs new Brendan Investments vehicle - summary views

    "The Management Team may be property experts, but they are not household names for successful property investment. In any event, most of the investment strategy in the prospectus is about what a firm of auctioneers CBRE tells them about the property market. If they are such experts themselves, why are they relying so much on CBRE and presumably paying big fees to them?"

    And this really was the key issue. They had no special expertise. And they were investing in geographic locations which they knew nothing about.

    Brendan
     
  12. Bank Manager

    Bank Manager Frequent Poster

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    ... and once again he starts to play the 'integrity' card. I got castigated for questioning this guy as far back as 2005. Played in a league way above his capability, where he really made his name by telling people to amalgamate all their debt in to one credit union loan, and that was the sum total of his ingenuity. Feel genuinely sorry for those that have lost money, the only bright spot being that they failed to reach their target of E1bn as undoubtedly they would have lost that too (after creaming off their own fees).
     
  13. Duke of Marmalade

    Duke of Marmalade Frequent Poster

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    So right Boss. Most of the criticism was leveled at the riskiness and the costs. But the real elephant in the room was that these guys hadn't a clue. They actually got lucky; by the time they had accumulated their war chest the property bubble had burst - they had luckily escaped this event. It would have taken a special kind of talent to lose on property from that position. They clearly had that talent.
     
  14. MrEarl

    MrEarl Frequent Poster

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    These guys were far from the only ones who didn't have a clue though.... there were new funds being set up all over the country, trying to sell us stuff they didn't understand or have experience in, not alone the investors who were being asked to put money with them.

    Eddie would try and sell sand to the arabs... he was involved in Taylor Investments in the 90s, it was Brendan Investments in the 00s, so people can make their own decisions on his track record.

    Personally, I just hope that we don't now see RTE handing him another paycheck - they successfully squander plenty of funds elsewhere, without giving this fella a slice of the Donnybrook property sale proceeds next !
     
  15. noproblem

    noproblem Frequent Poster

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    Agree with a lot of what has been said but at the end of the day they say, "a fool and his money are easily parted". Now, I don't altogether agree that all who invest are fools but if they are then I am one of them. I and some friends invested multiples of €100k each in what was known as, The Polska Fund, which was a property based investment in Poland and to say we were burned is putting it mildly. However, we went in with our eyes opened, at least I did and learned a big lesson. We weren't the first and we won't be the last. It wasn't the only time I got stuffed either, but there you go. I'm alive, didn't borrow the money and live to fight another day. You simply have to, or else?
     
  16. Duke of Marmalade

    Duke of Marmalade Frequent Poster

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    I see from this morning's IT that the latest prediction is total wipeout.