# Brendan Investments update



## Brendan Burgess (18 Feb 2012)

Colm Keena has reported on the accounts of Brendan Investments up to the end of January 2011 in today's [broken link removed] Note these accounts are a year old. I did an assessment of the product at its launch in September 2007

This is my summary from the figures in The Irish Times Report 



Initial investment - Sept 2007|€13m
Value attributable to shareholders at end January 2011|€9m
loss in value|31%

Total value of property|€26.49m
Less loans|€18.59m
net value|€7.9mThey probably have cash to bring up the value to €9m . 



loss year ended Jan 2010|€ 262,000
Loss year ended Jan 2011|€ 3.3mThis loss seems to be due mainly to the collapse of a tenant, which resulted in the building requiring €2.5m to be spent on refurbishment.


> The company has now fully committed its capital on German commercial  property, with an investment in a Frankfurt Airport project being made  during the financial year.


According to the prospectus
“75% will be invested in commercial property in Germany and the UK
25% will be invested in development projects in Portugual, the UK and Ireland”

I don't anything about continental property, but as the fund raised only €13m, it was probably a good idea to focus on just one country. And Germany may be more attractive than the UK, Portugal or Ireland. If it had raised its target of €250m, it would have been able to diversify a bit better.



> The directors received payments of €42,600 from the company for what were described as "other services".
> 
> 
> During the year the company was invoiced by Brendan  Investments Property Management Ltd for services valued at €360,000,  including directors’ salaries of €107,000.
> ...


If the fund returns in excess of 8% per annum, the promoters will earn a bonus of 20% of the return in excess of 8% per annum. They are a bit away from this.


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## ajapale (25 Feb 2012)

*Indo: Hobbs rakes in fees as investors are hit by losses.*

[broken link removed]

Eddie said on Marian that the article is just plain wrong. The Indo journo (Donal O'Donovan) did not bother to respond to requests to talk on Marian.

What are the issues raised by the article and who is correct?

_Update - The article seems to have been removed from the Indo website. _


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## Brendan Burgess (25 Feb 2012)

*Some points 

*Note 14 
It is currently envisaged that the investment exit date will be the initial exit date which is the tenth anniversary of the commencement date. However, the shareholders ( I think that these are the 4 directors and not the guys who invested through loan notes) may extend the period by up to 5 years. 


The ARD was 11/9/2011 and the return was not filed until 8th February 2012. 121 days late, so they paid  €463 in penalties for late filing.


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## Duke of Marmalade (25 Feb 2012)

Big write up (down!) in today's Indo.

*[broken link removed]*


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## Brendan Burgess (25 Feb 2012)

Eddie was on the Marian Finucane show to say that the Indo was just factually wrong. He said that the 4 directors got nothing from the company and, in fact,  the four directors paid €800k of set-up fees from their own pocket and they were under no obligation to do so.


*I don't know where the Promoters' fee is
*
Note 19 Related party transactions 


> The total value of services invoiced to the group by BIPM during  the year was €360,000 inclusive of directors' salaries of €107,000 (paid  by BIPM) on behalf of the group.  The directors of BIPM are the same as  the directors of Brendan Investments Pan European Property Plc.


The directors received payments of €42,600 from the company for  what were described as "other services".

The promoters charge 1% of asset value.  That would be 1% of €26m or €260,000. 

Eddie Hobbs said that the   Directors got nothing at all from the company.  He said that the   €360,000 was for managing €36m worth of assets. I don't know where the   €36m comes from. 




|31 Jan 2011|31 Jan 2012
Rental expenses|331,584|217,008
Admin costs |623,467|443,317Presumably the €360k is in the Admin costs figure?


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## Brendan Burgess (25 Feb 2012)

I have read the accounts of BIPM Ltd, the company which charges the PLC a management fee.   As it's a small company, they don't have to publish a P&L, just a balance sheet. But one can see from the balance sheet the accumulated losses. 



year ended |accumulated losses|profit must have been
August 2008|827,801|(827,801)
August 2009|503,533|324,268
August 2010|122,143|381,390This is what I think happened: 

The directors lent BIPM money. 

BIPM paid €800k in set up fees which it had no obligation to do. 

Brendan PLC paid BIPM the 1% fee. 

BIPM has used this to partially repay the investors.

So it would be correct to say that they have not got gained personally from it _yet_.


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## Brendan Burgess (11 Apr 2012)

Eddie is suing the Indo



> * [broken link removed] *
> 
> Eddie Hobbs - Friday, March 02, 2012
> Last Saturday the Irish Independent ran a front page story.  Tellingly, that story was taken down from its website by lunchtime and  no longer exists on line. Earlier, the Irish Independent failed to show  up on The Marian Finucane Show to defend its lead story despite requests  from the programme producers to do so. The serious allegations made by  the Irish Independent are patently untrue and, unhappily, it's response  to my request for a front page retraction has been unsatisfactory. Under  the circumstances I have instructed my lawyers to issue proceedings on  my behalf against the Irish Independent. I will not be making any  further comment.
> - Eddie Hobbs


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## Brendan Burgess (11 Mar 2014)

The investment seems to be getting back on track, mainly due to revaluation of houses in Detroit. 

http://www.independent.ie/business/irish/detroits-loss-is-hobbss-gain-30080088.html


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## Steven Barrett (11 Mar 2014)

Hmmm, a geared property investment with an entry level of just €5,000 has now gone and invested heavily in one of America's poorest cities; a place where you could buy a house for $1,000 after the crash there. Have they become slum landlords?

I doubt this is what people signed up to when they sent in their life savings. 


Steven
www.bluewaterfp.ie


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## Sunny (12 Mar 2014)

SBarrett said:


> Hmmm, a geared property investment with an entry level of just €5,000 has now gone and invested heavily in one of America's poorest cities; a place where you could buy a house for $1,000 after the crash there. Have they become slum landlords?
> 
> I doubt this is what people signed up to when they sent in their life savings.
> 
> ...



Indeed. Would like to hear more about these deals made by a  consumer champion.


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## Brendan Burgess (12 Mar 2014)

Sunny said:


> Indeed. Would like to hear more about these deals made by a  consumer champion.



Presumably you can find the Annual Report in the CRO? 

Brendan


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## GSheehy (13 Mar 2014)

Brendan Burgess said:


> The investment seems to be getting back on track,......



I'd hazard a guess that the majority of property funds launched around the same time as this one were totally derailed.

Do investors actually care where the money is invested as long as it makes them money?


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