Earn 6.75% p.a. with potential equity upside in the Talis Care Home Bond.

You could lose all of your money invested in these products. 

These are high-risk investments and are much riskier than a savings account. 

add

6.75% p.a. 

fixed interest

The borrower has the option to compound interest up until 10 December 2022, after which interest will be paid quarterly. 

info
add

9% -13% IRR

the target annualised internal rate of return on your investment across both the fixed bond return and the variable share return. Click IRR for more information. 

info
add

90% LTC

the loan-to-cost is capped at 90% of the cost of the portfolio

add

Up to 4 year term

The borrower can choose to repay part or all of the bond early at Downing's discretion and provided they pay a minimum amount of interest.

info

About this investment

Talis Care is a group looking to acquire, build and develop a portfolio of care homes across the UK. The company has been formed by Downing and the management of Care Concern. It owns two care homes in Scotland (as at 10 December 2019) and is looking to grow the portfolio over the next few years. 

Investors are being offered a fixed-rate of 6.75% p.a. with potential equity upside by investing in this Bond taking the target return to an estimated 9-13% IRR.

Talis Care aims to exit Downing investors through selling one or more of the care homes or refinancing the care homes as a group of assets within the four year term of the bond. 

Bond page infographic.jpg

Open for investment


Open for investment

Talis Care Home Bond

6.75% p.a.

Fixed rate interest

To view the offer document and invest please sign up or log in.
);

What do I need to know?

  • Why invest in care homes?
    • The demand for long-term care is on the increase, partly due to the discrepancy between the increase in life expectancy (79.3 years for men and 82.9 years for women) compared to the level of healthy-life expectancy (63.1 years for men and 63.6 years for women). Source: ONS, Health state life expectations, UK (2016-2018).
    • The baby boomer generation own over half of Britain's £11 trillion of wealth (source: Resolution Foundation, 20 June 2017), so there is a increasing demand for premium private care. 
    • In 2018/19 tax year 6,502 new beds were built across the UK and 6,459 beds were removed, therefore the UK is far off the target of having 18,000 extra beds per year over the next 20 years.
  • Where is my money invested?

    Your money will go towards the development of Talis Care's portfolio of two care homes (as at 10 December 2019), as well as its pipeline of new sites and further acquisitions of under-performing homes and turnkey new builds that are due to complete over the next few months. 

    The current two care homes are: 

    • Canniesburn: a 95 bed purpose built care home in an affluent suburb of Glasgow. In 2020 there will be a refurbishment enabling the home to be relaunched as a premium care service. 
    • Ballantine Court: a 90 bed care home in South Lanarkshire, Scotland. This purpose built care home was purchased from administration. 

    There is first-charge security over all assets, including the bricks and mortar of the care homes in the portfolio and any cash in the bank, meaning if something goes wrong Downing should be able to recover some value for investors. 

  • What are the risks?

    As with all investments, investing in a care home bond has risks that you should be aware of and comfortable with before you invest. Below are some of the risks, please see the offer document for more detail.

    • Capital is at risk -  Talis Care may not be able to repay the bond and / or interest at the end of the term. Repayment of the bond and interest, and the potential for upside in the shares is dependent on Talis Care selling its assets or refinancing the debt to effect an exit. Should the portfolio perform poorly it may not attract buyers or not provide sufficient income to allow for Talis to refinance and exit Downing Managed Funds.
    • We recommended you spread your funds across a number of investments to diversify risk and not place too much capital in a single investment.
    • This offer is higher risk than other Downing offers due to the higher loan-to-cost ratio
    • Refurbishment, development and construction risk – Talis Care looks to purchase care homes that require varying levels of work in order to reposition or open them. There is a risk that works could overrun on cost and / or time. Should this occur it could impact the borrower’s ability to service interest and its ability to deliver an exit that would provide value in the shares.
    • Operator failure risk – Care Concern’s business could face difficulties leaving them unable to operate some or all of the care homes in the portfolio. Should this occur Downing has the right to take charge of the assets and source a new operator. Please note that Care Concern are operating the care homes in the Magnus Care portfolio, therefore should you invest in this bond while already holding an investment in Magnus Care, you would be increasing your exposure and reliance on Care Concern.

    For a full list of risks please see here.

  • What could my returns look like?

    You can earn a fixed interest rate of 6.75% p.a. on the bond. The borrower has the option to compound interest up to 10 December 2022, after which interest will be paid quarterly and the rate will change to 6.25% p.a. + Bank of England base rate.  

    The value of your shares will vary depending on the performance of the business and the timing of any exit. The shares will only start to accrue value once the value of the business exceeds the total debt and accrued interest.

    The target internal rate of return (IRR) is 9%-13%. This is the annualised return on your investment across the fixed bond return and variable share return. The IRR takes into account the timing of cash-flows, which are not necessarily paid annually and is an indication of returns and not guaranteed. Read our FAQ on what is an IRR for more information. 

    The bond matures on 10 December 2023 but may be repaid early subject to Downing's approval and a minimum interest payment.

    The bond is eligible for investment through the Downing Innovative Finance ISA (IFISA), which means that any interest paid on the bond would be tax free. However, any shares you may receive will be held in your standard investment account as these aren't eligible for IFISA. 

  • What are the charges?

    All fees are payable by the borrower and exclude VAT. The advertised rate of 6.75% p.a. is the rate that bond investors receive after any fees. 

    Downing will charge 0.5% p.a. to Talis Care for monitoring the investment, building the portfolio and administering the bond. 

    There is a contingent fee of 2.25% p.a. which is paid by Talis Care alongside your interest payments and is only paid when bondholders receive their capital back in full. 

    In the event Talis Care either achieves a return greater than the stated fixed return of 6.75% p.a., or generates equity value, Downing will earn a 20% success fee on this additional return. This aligns us with investors’ interests.

    A one-off 2% arrangement fee is paid by Talis Care, based on the size of the bond raise. This relates to Downing's fundraising, origination, due diligence and execution activities associated with the offer. 

  • Who's the team behind the bond?

    This is Downing's fourth care home portfolio in partnership with Care Concern (the operator). Previous portfolios have included: 

    • Magnus Care - a portfolio of six operational homes. As at 30 September 2019 (latest valuation), all homes were performing in line with expectations.
    • Deeside Care Holdings LLP - a portfolio of seven care homes. In 2018, we successfully exited five of the seven homes, consisting of 390 beds.
    • Wallace Management Services - two purpose built care homes in Scotland that were successfully exited in 2019. 

    Downing first invested alongside Care Concern when the business operated across 12 homes. It now operates more than 40 homes with additional development sites. Downing and Care Concern have collectively invested over £100 million across 15 care home projects. We have extensive knowledge in the care home sector, having invested in our first care home in 1998. 

We're here to help

For more information please email us at crowdfunding@downing.co.uk, use the chat function or give us a call on 020 7416 7780.