According to Google, “IPF and its subsidiaries (the Group) are engaged in the provision of small sum, primarily home collected, short-term unsecured loans in emerging markets.”
In other words, they are a bunch of low-life bottom-feeders. On July 14, I described the company as “dubious”. The share price was 365p at the time, and it is now at 289p. The company is clouded by regulatory concerns.
IPF exemplifies why you should never invest in consumer scam companies. Although they can earn high returns on capital, they are prey to black swan events. I remember that this company was a top pick by a highly-rated fund manager. His arguments were tempting, but I don’t think he could have made much money out of it.
I don’t think he really understood the nature of the risk he was taking, despite having an AAA rating. People think that fund managers must be smarter, more experienced, and more knowledgeable than themselves. Sometimes practice just does not work out like that. As @stealthsurf points out, never outsource your risk management to others.
Nicholas Page is a former director of IPF. I wrote about him on 12 May 2013. His retirement was announced in September 2015. He was also on the board of failed accountancy firm TNO (RSM Tenon), a firm that was discovered to have “significant” accounting errors.
Furthermore, he was/is on the board of Care Europe SA, “one of Germany’s larger nursing and assisted living groups”. I have tried googling for their website, but cannot find it. Nursing homes have had a poor track record in the UK as listed companies, so I became even more sceptical about him.
The lessons I take from all this are:
- do not invest in junk business models
- do your own thinking
- the presence of Nicholas Page as a company director is a warning flag.