Are moringa tree investments worthwhile?
|Investment | Specialist
Asked by mansell, submitted
23 April 2011.
Do you stil hold the same view on the Mozambiqe Moringa Tree invesment as you held in august 10, i.e. Very High Risk and not to be touched ??
Answered by Justin on 26 April 2011
(this question refers to my article here).
There are really two things to consider for this type of investment:
- Will a chosen project likely deliver expected returns?
- If something goes wrong what, if any, investor protection will you have?
The first is very difficult to answer. Based on the limited amount of financial information published by the companies promoting Moringa investments I'm sceptical. Even if we assume the projections are fair and the project is 100% legitimate, other unpredictable factors such as climate or politics may affect returns. And, of course, we are assuming that there is sufficient long term demand for Moringa Seeds to ensure a profit.
The latter is far easier to answer, you'll likely have little protection as these investments are not authorised or regulated by the Financial Services Authority (or by any other overseas government bodies as far as I can see). Personally, I wouldn't make a land based investment I'll never practically be able to visit, especially if it's not covered by robust government backed regulation and investor compensation. Yes, these companies might have various legal agreements, fidelity insurance and escrow accounts etc but, bottom line, if there's a problem you may have to endure the hassle and expense of taking them to court to enforce any of these. Far better to be covered by a government backed investor compensation scheme (e.g. the UK Financial Services Compensation Scheme (FSCS)).
The track record for African based investments marketed to UK investors is also less than convincing: The Cru Africa Invest fund (which largely invested in agriculture in Malawi) and New Star Heart of Africa fund (which invested in more mainstream African stock markets) both failed miserably in recent years.
Maybe I am missing the investment of a lifetime, but I'll nevertheless sleep far more peacefully than if I did invest some of my hard earned cash in an African Moringa tree project. You only have to cast your mind back to ostrich farming or Dubai property to see how 'amazing' (unregulated) investments can quickly turn sour...
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Readers' Comments (4) - To post a comment please register or login
Comment by rafferty at 1:45pm on 27 Apr 2011:
Dickens was warning his readers about get rich quick schemes in Little Dorrit and other stories but 150 years later and they're still around.
I know very little about Taylor Langton Associates but notice they were previously giving their address as an office block in Barnet that offers both real and "virtual" accommodation - i.e. accomodation addresses with a receptionist and phone number. They were then calling themselves "land acquisition specialists".
Perhaps due to warnings about scams involving the selling of land banking schemes to gullible investors on programmes such as BBC's Moneybox they're now calling themselves "alternative acquisitions specialists" and operating from above an estate agent's shop in St Albans. Seem to be ambitious and have adverts all over the place for more salesmen on commission to work the phones.
A previous interesting Taylor Langton offer was properties in Brazil which they claimed were "up to 50% below market value". If true then perhaps a little odd that they needed to employ salesmen to sell those properties instead of selling in the market themselves for double the price. We can assume that as few people travelled to Brazil to see the properties they bought as those who will travel to Mozambique.
Seems it's just as easy to part people from their money as it ever was.
Comment by rafferty at 2:01pm on 27 Apr 2011:
Video of the BBC's expose of land banking schemes and the man who lost £100K: http://www.bbc.co.uk/news/business-12655496
Comment by mansell at 12:00am on 26 Apr 2011:
Thank you very much for your promp reply/view to the question asked over the Moringa tree investment,the reason I have been looking into this type of deal is,An initial investment was made on Jotropha in Cambodia,after calling at the Company office in the City of London,where I was impressed with there atitude,SO before getting deeper into this Investment I decided to actualy go over to Cambodia myself,and I must admit I found the whole Jotropha project,the people/managers involved very helpfull and welcome"ing,I was taken to one of the plantations where I discoverd Jotropha plants as far as the eye could see.
I was hoping the Moringa Invetment would be on the same level,BUT Im not too sure of Insight Group Pplc or Platinum Management Associates integrity towards individual investers,Do you have any knowledge or experience of long term deals through either one of these companys ? Does the Investment/company haveto be registerd with the FSCS?
Comment by justin at 9:11pm on 05 May 2011:
No problem. I don't have experience of dealing with either company because, as you can probably tell, I wouldn't touch these types of investment.
Investment companies don't have to be authorised and regulated by the FSA, but if they're not then you won't enjoy FSCS protection and will have to resort to pursuing any claim via the legal system yourself (at your own expense) if something goes wrong. This could prove especially difficult and expensive if the company concerned is based overseas.
If a company is unregulated I'd start by checking out their history via companies house, assuming they're incoporated in the UK. If they're based overseas then research could prove more difficult. But perhaps take a look at the other types of investment, if any, they're promoting. If they're all 'jump on the bandwagon' get rich quick type proposals I'd be very wary. If they're well established serious investments with a demonstrable track record and the company is regulated by a local government authority then perhaps take them more seriously.