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Our clients know that we focus heavily on bonds and loan notes that are backed by real assets. These assets are generally property related. Why?
Combine these benefits, and you have, in our view, the best possible investor protection in the event of failure of the bond or loan to repay capital or interest.
What is interesting is that quoted corporate bonds frequently have no security over real assets and in some cases no security at all. What investors are relying on is the business to continue to be successful and to generate sufficient working capital to service its loans. So even though you are lending to a quoted business, maybe one of the largest companies around, you could still lose all your money.
Investors rely on the company being in a strong enough financial state upon maturity, to either repay the loan out of current resources or to refinance by borrowing again in the market.
It doesn’t take a genius to realise that with increasing uncertainty over economic performance in the marketplace, combined with the relentless march of new tech initiatives, relying on the company to still be in a strong financial position in (say) five years, is not always a good bet.
Here’s a hierarchy of ‘value’ within assets provided as security for loans, starting with the safest and most reliable. Note that this is my personal view and you may choose to rearrange this list. Provided it gets you thinking about levels of risk and where you feel comfortable that’s great!
At Avantis Wealth, our focus is on strong lending propositions backed, as much as possible, by property assets. We aim to give clients the best of both worlds!
We promise that we won't SPAM you.
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Avantis Wealth Ltd is not authorised or regulated by the Financial Conduct Authority (FCA). This is not a financial promotion or an invitation to invest. Avantis Wealth Ltd does not provide any financial or investment advice. We provide a referral to a regulated advisor who will offer appropriate advice, or to the company offering an investment who will determine your suitability for the investment prior to any offer being made. We strongly recommend that you seek appropriate professional advice before entering into any contract. The value of any investments can go down as well as up and you might not get back what you put in. You may have difficulty selling any investment at a reasonable price and in some circumstances, it might be difficult to sell at any price. Do not invest unless you have carefully thought about whether you can afford it and whether it is right for you and if necessary consult with a professional adviser in accordance with the Financial Services and Markets Act 2000. These products are not regulated by the FCA or covered by the Financial Services Compensation Scheme and you will not have access to the financial ombudsman service. Information is provided as a guide only, is subject to change without prior notice and doesn’t constitute an offer of investment. This investment is restricted to persons who are high net worth, sophisticated or professional investors or who take independent advice from an authorised independent financial advisor.