Traditionally, Cypriot households have invested their savings in banknotes, government bonds, real estate, and insurance contracts. The search for low-risk investments was the main feature of the Cypriot investment mentality. Until recently, the above traditional forms of investment were considered very low risk with relatively good returns. For example, the real interest rates offered by banks were probably the highest in the European Union, while the returns on real estate investments were very lucrative. The perception that property prices can only move upwards was widely accepted in the Cypriot investing public.

Current situation

Today, and for the last few years, things are very different and some of the perceptions that prevailed in the past have changed. Deposits now offer negligible interest rates while real estate investment returns are zero or negative. The excessive money supply, as a result of the European Central Bank’s loose monetary policy, combined with low demand for loans, allows banks to offer interest rates close to zero and impose charges on deposit accounts. It is now clear that depositors have to pay to have their money in the banks. In addition, government bond yields are also close to zero. The recent issue of five-year bonds amounting to one billion euros by the Republic of Cyprus with a yield of 0.5% is indicative of what is happening in the markets these days.

New order of things

The new order of things does not seem to be a temporary phenomenon. Analysts point out that the policy of quantitative easing will continue to exist, not only in Europe but also in many other countries outside Europe. In addition, in Europe, the new banking rules of the “Banking Union” make it difficult to provide new loans, and banks are left with excessive amounts of liquidity resulting from deposits. As a result, yields on deposits and government bonds are expected to remain low for years to come. Our view is that the high returns we have had in the past in terms of traditional forms of investment are indeed a thing of the past. What is needed now are alternative forms of low-risk investments but with relatively high returns. One of them is Consulco’s London Credit Fund, secured with underlying assets in London.

The investment manager

Consulco group, operates an investment manager licensed and regulated with the Cyprus Securities Exchange Commission and the Financial Conduct Authority in the UK and structures as well as manages real estate, credit and private equity investments in London, for high net worth families and professional investors from all over the globe that choose London as one of their investment locations.

London Credit, a Consulco sole subsidiary company, is a London based finance company that has provided more than 120 million sterling worth of loans achieving a 100% collection rate for a record period of 9 years and producing a 6% annual net return for our credit investors during the period. This is a remarkable achievement, considering that the risk associated with this investment is extremely low.

Consulco has established the London Credit Fund licensed and regulated by CYSEC. The fund administrator is KPMG, the custodian bank is Eurobank, the external auditor is BDO and the fund’s legal advisor is Andy’s Triantafyllides and Sons. The fund manager is Consulco Capital and the loan service provider is London Credit.

Comparative advantages

The London Credit Fund is a promising alternative investment which suits the needs of Cypriot investors, low risk with good returns. The London Credit Fund invests via subsidiaries into London property secured loans providing investors the opportunity to benefit from:

  • 4 %+ pa target € dividend income payable quarterly
  • 5 %+ pa target £/$ dividend income payable quarterly
  • London property security for all the underlying investments
  • Flexible investment term of only 12 months minimum
  • Monthly redemptions with six months notice

We believe that because of London Credit Fund’s comparative advantages and the benefits asset and market diversification can provide to investors London Credit Fund deserves the attention of any well informed and professional investor.