We’ve had chocolate bonds and shaving bonds — now investors are being asked to subscribe to a gym bond. But worry not: it doesn’t pay out based on backers’ regularity on the treadmill.
Instead, the latest in the UK’s burst of unusual fundraisers comes from Greenwich Leisure (GLL), which manages 130 UK leisure centres and libraries. It is launching a bond to raise £5 million to invest in its sports venues including the Olympic Aquatics Centre, and work towards restoring the historic Royal Greenwich Lido. Funds will also be used for health and fitness facilities in Sidcup and Romford.
For investors, the bond scheme lasts five years, and pays out 5% gross fixed interest per year. That’s much higher than the average return on a savings account, but comes with a far greater risk. Any funds put into the bond could be lost entirely if the business failed: it is not covered by the Financial Services Compensation Scheme.
In addition, as the bond is not being issued on a conventional investment exchange that would allow trading, bondholders are unlikely to be able to access their capital during the five years.
The bond is being organised by ethical bank Triodos, and has a minimum investment of £2000, although GLL employees have a lower minimum threshold of £200. Details are at gll.org/b2b/pages/32.
Sadly, GLL isn’t offering free gym passes or any of the giveaways other unusual bonds issuances have offered in recent years. The rate isn’t as generous either: in 2010, Hotel Chocolat customers were invited to invest £2000 for a gross annual return of 6.72%, or £4000 for returns of 7.29%, with the interest paid by means of bi-monthly deliveries of chocolate.
King of Shaves’ founder Will King promised investors 6% interest over three years, plus free products, to its buyers of bonds in 2009. Still available is a BrewDog scheme, the third instalment of its Equity for Punks scheme, which allows people to invest in the Scottish brewer in exchange for shares, bar discounts and brewery tours. One share costs £95, for which investors receive £10 of beer vouchers and a lifetime 5% discount in its bars.
Without a plan to list the company, investors who aren’t just in it for the beer might be wary about getting their original investment back, although BrewDog’s founders promise investors a platform for equity holders to buy and sell shares from 2015,
The brewer has already raised £3 million of its £4 million target.
