As you know, so much of the business I’ve done over the years has come about simply by talking to people who interest me – finding out what makes them tick and getting an understanding of how I might be able to help them. One recurring issue that I’ve heard over the years – particularly from high net worth investors – is that they wish that they could turn their personal passion into a regular income.
Those passions take many forms – many of the people I’ve met love to collect paintings, while others collect rare diamonds, drive classic cars or stock their cellars with vast collections of vintage wines. Everyone has their passions, and if you have the money to indulge them, then why not do so? This kind of ‘passion investment’ is a wonderful way to grow your money – however it also means that many of these individuals have ended up putting a lot of their capital into the high value items that they’ve always dreamed of owning – but now their money is tied up until they sell again.
Is a regular return possible?
The big question that has always gnawed away at me over the years is this – how can these people follow their dreams and make these kinds of investments, while getting a competitive return or an attractive regular income? Then, about a year ago I came up with the answer – in the form of the OMNIA Corporate Bond which we launched in 2016 in the UK. So what is it, and how does it work differently to traditional bonds?
A bond like no other
I’m really excited about the unique structure we came up with for this bond, because it allows people to make money from the things that they’re truly passionate about. It’s a private equity model that we’ve never come across before – basically a five-year asset-backed bond will pay 8% gross interest every year over five years, with the investors’ capital returned in full once it matures. The unique part of the bond is that it allows for finance to be secured against high value assets – such as paintings or classic cars – to generate a regular income stream. How do we do it? Well, we raise a proportion of that asset’s value (but never more than 50%) and use that to fund investments which will pay the owner of the asset around 3% every year.
An innovative solution
That model certainly makes it an attractive offer for those investors who have followed their passion and put their money into these kinds of assets, and provides an investment route that traditional bonds have missed over the years. It really appeals to me as an idea – I’ve always been a businessperson who believes that good things should come from following your passion – it’s the way I’ve always done business, and I think that ultimately it leads to a much more fulfilling way of working.
It always seemed unfair to me that those individuals who used their money to invest in things that they were passionate about would not be able to benefit without selling those same things on – now, we’ve created a way that they can follow their dreams – and still get a regular income from those assets.