Secured Energy Bond investors wonder whether IPM have lost the plot

Some 973 investors have been stunned recently by the audacity of finance company Independent Portfolio Managers which claimed credit for its role in the launch of a £7.5 million mini-bond which went into administration earlier this year.

“In 2013, IPM launched the first successful secured minibond in the UK. Using its expertise in the solar park industry, it worked with a partner to produce a minibond that offered a 6.5% annual interest and where the investment was secured against all the assets of the business. This was an innovative solution and effectively disintermediated the banks; so that the investor received the high yield, not the bank,” boast IPM on its website. “This has now developed into the IPM Invest Division. Here, IPM is actively building an alternative financing solution for companies that are being starved of funding so that it can offer investors higher yields (by taking the banks out of the process). Again, the emphasis on preservation of capital remains at the heart of everything we do which is why IPM will only offer investors minibonds that are secured against the issuing company’s assets.”

The incredulity of the investors comes because the said bond, SEB, went into administration earlier this year, after the parent company, Australian based CBD Energy siphoned off most of the money before it could be used for the said purpose of investment in solar panels on a number of schools across the UK. The investors now look to lose all their investment – money incidentally that IPM as “security trustee” was supposed to be safeguarding.

Authorised and regulated by the Financial Conduct Authority, IPM operated as security trustee and director of SEB.

The original investment looked good, 6.5% paying over three years. The investment was to pay for the installation of solar panels on 22 schools across the UK – the payments to investors coming from the returns on the energy generated. Investors believed their money was safe because even if some problem arose with the company, the assets (ie the panels on the schools) would still be there raising revenue, so another company could take over.

All went well for the first months of the bond, interest was paid on the quarter, there was even an early bird payment for those who got in early.

This all changed last  January, when the fourth interest payment was not made. There was no response to emails sent to the company, the phone line was dead. A call to Capita, which dealt with the interest payments, confirmed that interest payments had been suspended.

As security trustee IPM were charged with overseeing investors interests. Initially, phone and email messages went unanswered before finally IPM confirmed that SEB had been put into administration. Grant Thornton were appointed administrators.

IPM have brushed aside letters from investors asking for their money back due to its failure to safeguard their interests. However, IPM it seems believe it has done nothing wrong, Aside from the above referenced boasting, the company has been pushing a new Providence Bond paying 7.5% over four years. IPM is playing a similar role to the one it did on SEB.

Making matter worse, many SEB investors, who never registered an interest in the Providence Bond, have been targeted by IPM as potential investors. 

The latest audacious boasting from IPM has enraged SEB investors who continue to ask when are they going to get their money back. They also wonder when the FCA is going to do something about IPM – the company charged with safeguarding security over the assets?

* For more information log in to the Grant Thornton portal at www.grant-thornton.co.uk/portal, where details of the group email appears.

- see: "If you see the words mini-bond', bin it!" - Patrick Collinson, Guardian -

http://www.pressreader.com/uk/the-guardian/20150905/282192239755680/TextView