Helping Investors to understand the risks
As with any Investment decision, there are always associated risks. By understanding how these can be mitigated you will be able to make informed decisions and be able to manage the risk to an acceptable level.
This summary is a designed to help investors and their advisers understand the principal risks associated with an investment through the Triple Point Income Service. It is important that investors fully understand these risks and we encourage you to consider them carefully before making any investment decisions. If you would like more information or detail about any of the risks, please contact us on 020 7201 8990.
Prospective investors should seek advice from a qualified, financial adviser to ensure that this service is suitable for their individual needs and circumstances.
Please remember that the legal and regulatory parameters within which businesses operate can change. Triple Point cannot give advice either on the merits of this opportunity or on its suitability
For individual investors and whilst this summary highlights the key risks, it does not and cannot cover exhaustively all of the risks that may apply to an investment through the Triple Point Income Service.
Risk to Capital
The value of an investment through the Triple Point Income Service may go down as well as up and investors may not get back all of the amount they originally invested. Investors should not consider investing unless they are able to bear the associated financial risks involved in investing through the Triple Point Income Service. Investors should not consider investing unless they already have a diversified portfolio.
Investors in the Triple Point Income Service should be aware that there is no guarantee that the investments will achieve their return expectations or targets. Prospective investors should be aware that past performance is not a guide to future performance and that any statements made in relation to expected performance are projections rather than guarantees.
The performance of the companies in which the Triple Point Income Service arranges investments is dependent upon a number of factors which include the quality of their customer bases and their respective revenue streams, the strength of management and controls, and the value of any assets held as security. Both specific and general circumstances can adversely affect customers’ abilities or willingness to meet their obligations. Businesses may also be affected by competition, interest rates, inflation, employment rates, and other macroeconomic factors over which the investment manager has no control. There is therefore a possibility that one or more of the holdings into which investments are arranged may underperform and cause a loss of value for the investors.
Investments may be arranged into a single Direct Lending company. This limited diversification could increase the risk for investors.
It should be noted that while investors may only receive one individual debt security issued by one Direct Lending company, that investment will be secured against an existing portfolio of 1,000s of carefully vetted SME businesses.
Investment period and illiquidity
Investors are committing their money for a specified duration and so it is important they understand they cannot liquidate investments early. Investors can request an early repayment of capital but the Triple Point Income Service is under no obligation to do so. Investors should bear this in mind when deciding the amount they are happy to invest and the term selected. Partial repayments of capital are also not possible or permitted. Reliance on the Investment Manager Triple Point has been appointed as the Alternative Investment Fund Manager of Triple Point Income Service and is dependent on certain key individuals and on their business and financial skills. The success of the Service will depend upon the ongoing ability of the investment manager to identify, source, select, complete, and monitor appropriate investments.
Dealing with SMEs
SMEs are on average more risky counterparties than larger companies as they may be less prepared for the economic factors (such as interest rate changes, inflation, political and regulatory changes economic uncertainties etc.) and company specific risks which they face.
The businesses which we lend to (or are entitled to receive payments from) are subject to UK-based economic risk. If there are adverse changes in the market or in the macro-economy, this could cause the investment to generate less income than expected which could in turn impact our ability to make payments to investors.
Details of SMEs with whom Triple Point is dealing with may not be disclosed on a named or detailed basis to investors because of confidentiality and other restrictions. To this extent, investors may not, therefore, have an opportunity to evaluate for themselves such SMEs and, therefore, investors will be dependent upon Triple Point’s judgement and ability in deciding which businesses to deal with.
Financial Services Compensation Scheme (“FSCS”)
FSCS protection does not apply to investments held in the Triple Point Income Service.
FSCS protection may apply to deposits. Deposit protection applies when money belonging to investors is held in the Client Account. With investments in the Triple Point Income Service, this occurs initially when investor money is transferred to us to make an investment and when interest repayments and the repayment of capital are being held on behalf of Investors. While the money is in a Client Account (which is likely to be a short period) it is protected by the FSCS deposit protection which is currently £85,000 per person. This Client Account is operated by TPIM and is held with the Royal Bank of Scotland plc.
The amount investors can invest into an ISA each year is decided by the Government. Currently ISA investments are free from capital gains tax and income tax. These benefits may be changed by the Government in the future and investors should make sure that they understand any changes that are made. Once investors have invested the maximum they can’t make any further contributions in the tax year. This means that if investors withdraw money from their ISA they will not be able to pay it back in if they have reached their annual subscription limit. If investors decide to transfer an ISA from one company to another they will need to do this as an ISA transfer rather than take money out and pay it back in again. Investors can transfer cash to an IFISA from an existing cash or stocks and shares ISA. If investors choose to transfer cash from a stocks and shares ISA, they may be required to sell current investments.
Changes in law, regulations or administrative practices
The structure of the Triple Point Income Service is based on English law, regulatory and administrative practice in effect as at the date of the Information Memorandum, and has due regard to the expected tax treatment of all relevant entities under UK tax law and the published practice of HMRC in force or applied in the UK as at the date of the Information Memorandum. No assurance can be given as to the impact of any possible change to English law, regulatory or administrative practice in the UK, or to UK tax law, or the interpretation or administration thereof or to the published practice of HMRC as applied in the UK after the date of the Information Memorandum.