DOWNING Crowd has launched its first bond that combines debt and equity investing.
The Pelham House Bond has a term of up to five years and nine months, and offers investors returns of 7.5 per cent per year.
The money will help Artemis Venue Services in its acquisition and refurbishment of the grade II listed Pelham House Hotel and to turn it into an exclusive-use wedding venue, providing catering, bar sales and bedrooms for wedding couples and their guests.
Interest will be rolled up for the first two years to allow the business to invest in its growth, but to reward the extra risk, investors will also receive shares in proportion to their debt investment so they will share in any increased value of the business on exit.
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The bond has a £2m funding target and has already raised almost £800,000.
The bond will have first-charge security over the property and the assets of the business.
Artemis’ management team is investing £1.55m, which will rank behind Downing investors’ debt.
“This offer is more complex than our standard bonds, therefore it’s likely to be better suited to more experienced and confident investors,” Julia Groves, partner at Downing, said.
“However, both the quality of Pelham House as a venue and the strength of the new management give us confidence that this bond can provide generous rewards for investors who are able to take on the additional risk.”
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Groves said letting investors benefit from the growth of a business as well as earning a fixed return is an “exciting new direction for Downing.”
“But, at the same time, this move continues to be backed by the same thorough due diligence and our 30 years of experience in seeking out high-quality UK businesses, with over £150m of our £1bn assets under management held in the leisure sector,” she added.
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