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Has anyone had any experience with Godwin Development / Godwin Capital? I am currently conducting due diligence in order to evaluate their Loan Notes. My particular interest is in the 2 year income note.
Many thanks in advance.
Is Godwin Capital the same one as the "fundraising arm" of Godwin Developments as quoted from the publicity of Godwin Developments?
I am always dubious of any company which up sells itself ("fundraising arm"; visions of a dynamic team) and then it turns out on companies house to have £100 net assets and no employees according to its latest accounts.
Its directors appear to have over 50 companies each, what's that all about?
10% per year on an unregulated investment. Can you stand to lose your whole investment?
Many thanks for your reply, much appreciated. I have tried to respond to the comments below and also added some more food for thought:
** Agreed. From what I can gather:- Godwin Group has been around for c. 15 years and the Board includes the founders of the business (Stuart & Stephen Pratt) and some interesting senior professionals (formerly GKN PLC, KPMG, Natwest etc)- they have a number of projects spread across residential, commercial and mixed currently in development or acquired. Hard to tell from the website which are the projects (if any) which Godwin have developed from scratch, completed and subsequently either (i) still manage or (ii) have sold. - they mention several highly visible names as tenants in the projects to be developed or in the projects acquired including Lidl, MacDonalds, Costa, Subway, Starbucks, Greggs etc
** I assume these are SPVs which are formed to ring fence individual projects and provide remoteness
** You have hit the nail on the head and this is exactly the question I am trying to address. Even though first charge security is on offer, I need to establish the credit worthiness of the project(s), the comfort/buffer in place, the security enforcement, etc. I was thinking of placing a small % of overall portfolio.
I have only just initiated by DD, but thought to ask the Tribe community as a part of my efforts.
So far I have requested the following preliminary questions:
* What is the capital structure of the projects?* What amount of equity does Godwin (or otherwise) contribute towards the projects? Or are they entirely debt financed.* What are the use of proceeds from the loan notes? Are proceeds directed towards a specific development (over which the first charge is granted) or general corporate purposes* What is the current status of the GBP 10m fund raise (which is broken down into individual GBP1k notes, minimum for entry is GBP 5k)? How much has already been raised?
Will endeavour to keep you posted as to how my DD develops. Thanks again for taking the time to contribute.
You are certainly going about this in a comprehensive manner, kudos to you. Great pity your example is not followed by all. I never fail to be amazed at how naive and gullible some people are with large amounts of money that they can ill afford to lose!
All the best.
So my question I’m asking myself. Why ask individual investors and offer 10% if they can borrow for 8% from banks. If the developments are good development finance is easily available (have not yet tried it myself). Good development and developer can easily afford current finance and generally there should be enough headroom in the project to finance at 65%.
But as mentioned I have not yet done it myself
Thanks for this explanation, provided me with some useful context.
Virtually all small property developers need funding from outside of Banks. Really???? We don't, and the majority of competitors that we are in touch with don't.Our lenders are keen for us to borrow more than we can use and a lot of developers are in that boat.The developers I see that want private funds want the money because its riskier deals the banks won't touch or are borderline, but these guys do it because if they fail they don't lose anything and all the time the deal is running they take a management fee.
If the guys mentioned in this thread are doing pre-lets to the likes of McDonalds / Greggs etc, banks would be banging the door down to lend on those schemes and sub 5% and probably up to 80% LTV
Stewardson Developments Ltd.
Burson Land Ltd. & Jennings & Gilchreaste Ltd.
Follow me on twitter - @philstewardson
By way of update, I invested the minimum amount. First coupon is due in a couple of weeks, will keep everyone posted how it goes...
Received the first coupon (after emailing them a reminder which I found a bit odd). The payment was made immediately after my email enquiring when payment would be made.
Since the facility is for general corporate purposes it is difficult to ascertain the use of proceeds and evaluate the credit risk, however from the general updates available on the website etc the core business seems to be continuing to perform.
Will continue to keep the tribe updated. As a reminder it is a 2 year bullet product with semi annual interest payments.