Dolphin Trust - Now known as the The German Property Group (GPG)
If you currently have funds invested with Dolphin Trust, or, the German Property Group (GPG) as it’s now known following its name change in April 2019, then you may be worried by the exposé by BBC Radio 4’s You and Yours programme.
It appears all is not well with an investment that was sold through different pensions with Rowanmoor, Berkeley Burke and Guinness Mahon, who are three of the big SIPP Providers involved. Certainly, some investors whose funds matured within the last few months are still waiting to receive their money back. The GPG says only 20% of its customers are affected and has laid the blame on various issues surrounding planning and construction work.
Founded by Charles Smethurst, the GPG specialises in the purchase and refurbishment of listed German buildings and their conversion into luxury apartments. They rely on generous tax breaks from the German government on purchase and in turn sell these properties off plan to higher rate German taxpayers who also receive a tax incentive for their purchase. It is claimed that investors have protection by being collectively given a first legal charge over each development.
The GPG is believed to have raised up to £600 million through a combination of pension funds through SIPPs, SASSs (small self-administered limited company pension schemes), hedge funds and private investors. Unfortunately, it seems that, in many cases, the investment was sold through a raft of unregulated advisers earning commission believed to be in the order of 20%.
Returns were attractive, with “loan notes” typically offering fixed returns of between 10% and 12% over 2- and 5-year terms and payable either as income or as a growth option. Without doubt, some earlier investors have been very happy with their returns, so much so that they have re-invested again. That aside, cost of the finance to the GPG when you strip the figures back does seem worrying. High commissions and high loan note rates could easily see any business haemorrhage cash given even the slightest of planning and construction delays.
Perhaps the obvious question would be why one of Germany’s biggest and apparently most respected developers would simply not seek banking funding for a fraction of the cost. Since the last financial crash, banks tend to be somewhat more prudent and invariably will only lend after significant due diligence on both the borrower and each individual project. Only time will tell if therein lies the issue.
If you have invested with Dolphin Trust, now known as the GPG, and are concerned that you may have lost money, Beat the Banks are here to help. For more information, please call 01382 200474 or text Pension to 87007