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 (advice@adamfayed.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.
The 79th Group do not focus on UK-resident investors, so this review should be considered more by people living outside the UK.
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 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).
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.
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.
Conclusions
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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Adam is an internationally recognised author on financial matters, with over 583.2 million answers views on Quora.com and a widely sold book on Amazon and a contributor on Forbes.
