An unauthorised car parking scheme that closed after discussions with the FCA has been criticsed over a “clumsy” offer for investors to buy-back their spaces early.
Last month, the FCA ruled that some of Park First Limited’s schemes met the regulatory definition of a collective investment, so should have only been operated or promoted by authorised firms. However, Park First was unregulated.
In documents seen by Money Marketing, in which Park First describes itself as an “innovative secure property investment”, the company says because of the FCA’s ruling, it has had to change the structure of its investment.
It is offering investors the option to either enter into a new lifetime leaseback arrangement, or to sell back their space under an early buy-back option.
The leaseback, which grants shares in a Park First management company, offers investors a fixed 2 per cent annual yield plus variable dividends from the management company’s profits.
However, investors wanting immediate exit will have to wait six months to have their investment returned, and could wait as long as a year. Park First will deduct the rental income it paid to investors from the repayment, and investors may also receive less interest if they wait more than 60 days to accept the buy-back offer.
An investor tells Money Marketing: “I think for the FCA to deem this as a collective investment, and them just let Park First walk away by making a rather clumsy and unpalatable offer of their lifetime lease back scheme is deplorable.
“I have decided to take their buy-back offer, however this offer has many strings attached, like any usage payments would need to be paid back, and that you need to hand back title to the spaces to Park First, which then has a year to sell them. All in all, a great piece of leg work by Park First to make as much out of this as possible.
“I called the FCA, who just quoted their statement, an absolutely toothless organisation, taking the easy option out.”