Dolphin Trust or Dolphin Capital Gmbh which is now called the German Property Group (GPG) is an unregulated German property investment. Investors mostly bought into this through financial advisers across the UK & the EU. Most investors bought in through what was supposed to be a ‘guaranteed’ loan note or mini bond as it is also known as. It purported to specialise in the redevelopment of listed German buildings and benefiting from German tax breaks.
The company was founded and run by Charles Smethurst in 2008 and apparently raised approximately £800 million of investment from pensioners and retail investors, resident predominantly in the UK and Ireland. A significant amount of investment money was received from Institutional banks in Singapore and South Korea who placed their clients into Dolphin loan notes or listed securities.
The loan notes promised returns of 10% p.a. and 12% over 2- and 5-year terms depending on which option the client selected to invest in. These loan notes also paid the financial advisers very handsomely in the region of 10% upfront and therefore mostly attracted unregulated introducers.
Investors were assured that they held first charge over specific German properties that would be redeveloped into high end flats for German professionals to buy tax efficiently. The trust seems to be a mixture of gross negligence and potential misappropriation. It appears there are 60+ properties across Germany which can be liquidated but allegedly the legal paperwork will require months or years to untangle. It could be quite some time before investors receive anything back from the sale of these properties. Newport Litigation are seeking investors into this fund to join the group action against any Financial Institutions, Life insurance companies or Pension Trustees who facilitated or profited from this clearly unregulated investment.