This article will review the investment opportunity associated with this group, including the positives and negatives.
If you have been proposed this investment and want a second opinion, you can email me (email@example.com) or contact me here.
We can sometimes offer discounts, and other benefits, if you want to invest into this option, compared to many other brokers.
If you are an advisor or introducer who is looking to distribute the 79th Group, or want to understand more about the terms, you can also contact me, as we co-operate with several people globally on alternative investments.
The 79th Group do not focus on UK-resident investors, so this review should be considered more by people living outside the UK.
Table of Contents
First who are the 79th group?
79th group are a family-owned UK property company that specialise in distressed property assets in the United Kingdom market.
Most of the investments they offer are 1-2 years in length.
Thus far, they have had a 100% track record in repaying investors, having repaid over 10million Pound Sterling.
The 79th group typically gets into assets that are distressed, meaning that they are buying them at 40%-60% of their “fair” value.
This is often possible because most non-professional investors don’t want to spend moths renovating distressed property.
What are some examples of their past projects?
One of their past projects is Millennium Park in Warrington, close to the M62 and M6 motorways. The Gross Development Value (GDV) is over £5 million Pounds.
This is a commercial project involving office buildings.
The picture below from novaloca shows the outside of the project.
One of their residential property projects was The Old Workhouse in Northumberland. They are currently restoring this site.
As per the image from bookings.com below, the site is attracting tourists.
What is the return on investment?
They have different return options. One pays 1% per month (12% per year) on a 1-year basis, with a 7.5% biannual return (15%) being a second option.
On a two year term, clients can get paid 1.25% per year (30% in total over 2 years) or 8.75% every 6 months (35% in total).
This is for the loan note option in the UK.
Do they have other investments?
Yes. This review is primarily focused on the UK loan note investment.
They are also expanding, so have private equity and other options such as the DMCC in Dubai, and in natural minerals.
They have many interesting projects in Guinea linked to gold mines.
What are the positives associated with this investment?
The main positives are:
- The founders have a long-term track record in the market.
- As they specialise in distressed property, a recession could help their business model, as more people want to offload assets quickly
- Investors do have a first charge against the asset. Therefore, in the event of default, investors have first charge over the assets
- Typically, the group secures property at 30%-45% of market rate, which allows for decent margins, even adjusted for the high returns paid to investors.
- This investment can be reinvested every 1-2 years, which does mean that it isn’t a big commitment
- They have a security trustee, called Castle Trust Group, which adds credibility
- You can invest in up to 26 currencies, which is more than most providers accept. With most comparable options, USD, Euros and Pounds are the only options.
- Low minimums from 10,000-25,000 GBP, depending on the type of investment the investor wants to make
- Over 90% of their investors have reinvested.
- There are no additional fees to pay on this investment. All costs are baked into the return.
- They are forward thinking and always bringing out new product offerings.
What are the negatives
- You could lose 100% of your money invested if things go wrong, however unlikely that is.
- The model only works due to the good ROI which is scored against distressed assets. If those distressed assets are harder to acquire in the future, the whole model might not work.
- Like any loan note structure into private companies, you don’t have as much transparency as investing through a loan note.
- With corporate AAA bonds providing higher returns in 2023, you always have to question how much risk you want to take relative to the return.
This can be an excellent alternative investment for your portfolio.
However, for most people, investments like this should only form a small percentage of a larger portfolio.
The risks involved do make this unsuitable for many smaller investors, or for those that are more cautious.
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