Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
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Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You won't get your money back quickly

  • Even if the business you invest in is successful, it will likely take several years to get your money back.
  • The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
  • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The value of your investment can be reduced

  • If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
  • These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.
Carlton Bonds-1
Insights
Investing Capital
tax efficient investments
Tax Efficient Investing
Craig Peterson
· 2 min read
· Updated on

Introducing CARLTON Bonds: IFISA-Eligible Property Bonds

It’s been a busy start to 2019. The Growth Capital Ventures team have been putting the final touches to our latest tax-efficient investment product - CARLTON Bonds.

We have been working to develop and launch the CARLTON Bonds Investment Platform. The platform offers investors the opportunity to access tax-free returns of up to 7.75% per annum by investing into property bonds through, amongst other options, the CARLTON Bonds Innovative Finance ISA (IFISA)

Investing into property bonds with CARLTON Bonds

  • Monies raised from the launch will be used to provide finance across a portfolio of secured projects – primarily into property deals led by the GCV team. Security (either first or second ranking) will always be taken over borrowers assets.
  • Open to experienced investors with a minimum investment of £1,000.
  • Maximum raise under the bond offer of £7 million.
  • Fixed rate returns of between 4.75% and 7.75% per annum.
  • Investors can choose either a 2 year or a 4 year Bond and then decide to receive interest quarterly or at maturity of the Bonds – these choices will determine the interest rate earned.
  • Investments can be made through an Innovative Finance ISA (IFISA) which means that income is earned tax-free.
  • SIPP and SSAS eligible subject to pension providers approval.
  • The first tranche of Bonds will be issued on 1st April 2019 – still within the 2018/19 tax year which could be useful if you have not used your current year ISA allowance. Further tranches will be issued each month after that – so investors can utilise their 2019/20 annual ISA allowance.
  • Annual ISA/IFISA allowance of £20,000 per annum.
  • Streamlined and automated online investment process – apply directly through the CARLTON Bonds Platform at www.carltonbonds.co.uk
  • Review and monitor your investment through your personal investor dashboard.
  • Capital is at risk – in a similar way to a Stocks & Shares ISA (and unlike a Cash ISA), the investment is not covered by the Financial Services Compensation Scheme (“FSCS”). This explains why the anticipated returns on the Bonds are higher than what can be achieved on a Cash ISA – it is an investment product rather than a savings product.

Innovative Finance ISA

The IFISA market is still relatively new (first announced in 2016) but it is growing rapidly – more than £290m was invested during the 2017/18 tax year. Following the extension of the IFISA legislation in August 2016, more investors are now taking notice of the product as the move away from Cash ISA’s continues. Cash ISA savers have been struggling to find one able to match the rate of inflation and therefore have been looking for alternatives and the IFISA is proving to be a popular new choice.
Driving Growth.
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Backed by

Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.