The Bond is an investment and capital is at risk. The offer document will provide more detail of the relevant risks, but it is important you understand the following general risks.
Your Capital is at Risk
While investment is in our bond your capital is at risk. The value of your investment can go down as well as up. You may get back less than you invested.
No FSCS protection
The bonds that you will invest in are issued by Absolute, which is unregulated, as are the bonds themselves. Therefore any losses incurred by the failure of the bonds would not be protected by the Financial Services Compensation Scheme (‘FSCS’). If Absolute ceases to exist or goes into liquidation you would not be able to put in a complaint through the FSCS or be covered by them for any loss.
Impact of fees
Full details of the fees payable by investors to Northern Provident Investments Limited are set out in The Absolute IFISA Terms and Conditions, and these will reduce the net return on your investment. Investors of smaller sums in The Absolute ISA should be particularly aware of the fees and should carefully consider the impact these could have on the proposed investment.
Exposure to external events
The trading and assets of Absolute and the firms it lends to could be affected by unforeseen events outside its control, including economic, social and political events and trends. These include changes in economic, political, administrative, taxation or other legal or regulatory regimes, terrorist or other attacks, inflation, deflation or other currency exchange fluctuations.
Absolute’s security may be insufficient to repay the Bondholders
Whilst Absolute may take security over the assets of firms it lends bond funds to, the underlying assets of the firms over which a charge has been granted may be insufficient to repay Absolute. In that situation Just may not be able to pay what it owes to the Bondholders.
Diversification means spreading your investments across different asset classes and sectors. All investments through The Absolute ISA will be in bonds, you should be aware that all monies invested will be in the same sector and through the same asset class. You should consider spreading your investment risk and seek independent advice when you are not sure if an investment is suitable. You are not able to invest more than 10% of your net assets through The Absolute ISA in the bond unless you are a high net worth investor, a certified sophisticated investor or a self-certified sophisticated investor.
Non-readily realisable investment
Investors should be aware that the bonds you will invest in are non-readily realisable investments. Investment through the Absolute ISA should be viewed as a long-term investment. It may be possible for the bonds to be sold but it may be difficult to sell the bonds held through the Absolute ISA.
Past performance of financing is not necessarily a guide to future performance. Past events, experience derived from these, or assumptions derived from any of these, do not predetermine the future.
The Company’s business strategy
The Company’s business plan is based on assumptions about market performance and predicted future trading of its current and proposed business activities, which are supported by research undertaken and the team’s experience to date. The Company considers these assumptions to be reasonable but is inherently subject to variation and uncertainty. There is no certainty that all or any of the elements of its business plan will be fulfilled, that the outcome of the Company’s strategy will be as anticipated or that the Company will achieve the required level of profitability or sufficient cash flow to achieve its stated objectives.
You should be aware that if the return on the bond fails to pay a return that beats inflation, especially the real value of your savings could fall. Your capital is at Risk. Please be aware when investing that your capital is at risk and the value of your investment can go down as well as up. You may get back less than you invested.
Failure of Bond Marketing
There can be no guarantee of investor appetite for the Bonds to the extent predicted by the Company or, indeed, at all. Should investor appetite cease or reduce the Company may not have sufficient capital to complete projects/loans in ode to generate a return. In such circumstances, investors may lose some or all of their investment.