Biomass investment

!RAY

Registered User
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215
Hi All

Thinking about some investments has anybody experienced investing in Biomass. Capital is guaranteed and its government backed.

Cheers
 
Hi Ray, these are not what I would consider capital guaranteed products. There may be certain guarantees etc. in place such as supplier guarantees but in terms of risk these investments would generally fall in the medium range. The returns can be very strong and the products I'm aware of have excellent precedent. But these are not what I would consider a low risk investment and not something to put your life savings into. However, I think the better ones can definitely be worth a punt with some of your available funds.

Gerard
www.proactivefinance.ie
 
Who's guaranteeing it?

Very good question and following on from that (assuming you are happy with the guarantor), under what circumstances can they get out of paying up on foot of the guarantee ?

Also, does anyone else have a claim on the benfits or proceeds of payout on foot of the guarantee ?

There was a very expensive lesson learnt by a lot of people who bought the likes of foreign sale and leaseback properties "with guaranteed rents" years ago, so hopefully thats a lesson everyone can learn from and remember, when we seen mention of anything being "guaranteed" !
 
Sorry All for not replying.
Thanks for your comments, the investment is asset backed sorry for my wrong post.
@Gerard the return is due to a service agreement I would think is the best way of explaining. It is government backed short term fixed return investment. There is a construction guarantee in place and power purchase agreement in place.
 
It is government backed short term fixed return investment. There is a construction guarantee in place and power purchase agreement in place.

We've had these type of things before. None of the above guarantees your investment. Buyer beware.
 
Sorry All for not replying.
Thanks for your comments, the investment is asset backed sorry for my wrong post.
@Gerard the return is due to a service agreement I would think is the best way of explaining. It is government backed short term fixed return investment. There is a construction guarantee in place and power purchase agreement in place.

Two things this is a very small project which means if it really was such a good deal the promoter should have no problem coming up with private investors to finance it, so why is it being opened up to all and sundry???

The second is that you clearly don't understand how this thing is put together. You say the return is government backed, but the documents say a certain level of plant revenue is backed... you say it is asset backed, but the valuation is restricted to as set of parameters given by the company so who knows if it is a market value or not??

Best avoided I think.
 
Hi. This is my first post as I came across this project last year. The project itself seems fine if you are looking for a higher risk option. It is essentially a bridging loan to allow the promoters build the plant which is underpinned by existing government supports once it has been completed. The investor is therefore bridging the funding need over the 3 year term. A few concerns in that (i) that the guarantee seems to be over egged on the promotional material (ii) that the return may not really be high enough to compensate for the fact that the investment is higher risk bridging finance.

When I did some research on this project however, the biggest concern was that the investment is unregulated and therefore does not have to present all the information or in detail that is typically required by law/regulation for regulated investments. And this hides the biggest issue I came across - any adviser who sold the product last year was making up to 10% sales commission and did not have to disclose this to the investor as it was an unregulated product. I know a number of advisers in the west who refused to show this to their clients as they felt that this was plainly wrong. Others I heard had no such concerns and to use that awful phrase "filled their boots". If advisers were getting 10% it is not inconceivable to think that there could have been another 10% in the deal for others involved (trustees, pensions, lawyers etc.). And the truth of the matter when it comes to all investments is that the investor always pays the fees one way or the other. The big problem with this deal then is that ordinary investors were getting involved in a relatively higher risk project on the back of advice by advisers who were being paid way over the typical commissions and they didn;t have to disclose it.

Hope that helps. Like I say there doesn't seem to be anything wrong with the project itself - but the thinness of information, the fact it is unregulated and worse of all the huge undisclosed fess cause concern.
 
Reviving this thread as my guess is the investment being discussed here is currently before the the courts.

The promoter is trying to avoid a wind up where investors will only receive a return of 11% of their original investment. Best case scenario it seems is a “possible” return of up to 80%.

An article in a prominent Irish Sunday newspaper yesterday discussed 300 Irish investors with an average investment of 100k, some have even allocated significant parts of their pension to it.

A financial advisor friend proposed this to me as an investment back In ‘18. Oddly there were some minor typos in the prospectus which put me off. I was surprised to read of the 11% broker fees and the complex company structure & it reminds me of the Dolphin Trust saga.

A bullet dodged in my case & good luck to those caught up in it.
 
One of my relatives is caught up in this. It doesn’t sound promising and he is very worried. He asked me to look at his paperwork and one question occurs to me regarding a potential conflict of interest.

My relative, who was in his mid 60s at the time and in poor health (see below), initially approached a financial advisor that had been recommended to him to advise him about where to put/invest a €250k lump sum he had received from a policy after being diagnosed with a critical illness (thankfully he is still alive after a difficult diagnosis but the battle continues). My relative’s pension is small and he said he told the financial advisor he wanted some level of investment return on the €250k, rather than just sticking it into a bank account. The financial advisor suggested this is a potential option - I am not sure if any other options were discussed, but I asked whether the financial advisor discussed lower risk options like putting it in cash, bonds, even equities, but my relative doesn’t think so. I asked my relative if the financial advisor made it clear at the time that it was a high risk, high reward investment, and my relative said that the financial advisor said it was as risky as any other investment, he could make money or lose money, but nothing out of the ordinary. My relative said he signed all the documents and completed all the questionnaires etc which assess your risk appetite.

What I found interesting is that the founder of the financial advisory firm that my relative received advice from, is the CEO and co-founder of the company behind this project. My relative did not know this and no one told him.

I obviously have sympathy for my relative but at the same time it could be argued that he simply took a punt and it hasn’t come off.

But I’m wondering, could he possibly have a case for mis-selling of a financial product? As stated, he was in his mid-60s, in demonstrably poor health, with little or no other income, a small pension, and his financial advisor suggests this high-risk investment as an option, without explaining that the CEO of the company behind the investment is the financial advisor’s boss!

I’m just wondering if it’s worth talking to a lawyer about this - there is a law firm saying that they are acting for some investors. I wonder if they would take such a case, no foal, no fee, as my relative wouldn’t have the money to fund such a case.

Or do people think it would be a waste of time?

Thanks.
 
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A financial advisor should always disclose any conflict of interest.

I suspect that if you look at the documentation your relative signed, he was informed of the conflict of interest.

If not, he should take a case to the Ombudsman and report the matter to the Central Bank.

Brendan
 
I suspect that if you look at the documentation your relative signed, he was informed of the conflict of interest.

If not, he should take a case to the Ombudsman and report the matter to the Central Bank.
@INYWIFNW
While looking at that documentation, see is it clear that the investment is in an unregulated product.
 
What exactly was this investment?
Was it a farm slurry digestor or something like that?
What exactly was it?
 
A financial advisor should always disclose any conflict of interest.

I suspect that if you look at the documentation your relative signed, he was informed of the conflict of interest.

If not, he should take a case to the Ombudsman and report the matter to the Central Bank.

Brendan
Thanks Brendan. I’ll have a closer look at that. It didn’t jump off the pages of the documents I’ve looked at, but I wasn’t looking for it.
 
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