Downing Crowd to raise £1.87m for pub conversion

Hedderwick Ltd is aiming to raise £1.87m through the crowdfunding platform.

The Hedderwick Pub Bond can potentially earn investors up to 6.25% pa interest over 12 months and will be available through Downing Crowd’s new Innovative Finance Isa tax wrapper, which allows investors to earn tax-free interest.

The new pub is set to open at the end of 2017 and is managed by Oakman Inns, which has previously raised £2.6m through crowdfunding for other sites.

Peter Borg-Neal, founder and CEO of Oakman Inns and director of Hedderwick Ltd, said crowdfunding investors had helped it turn a vision into reality and was excited to be working with the Downing Crowd for this latest project.

“It’s true that there have been some headwinds for the wider pub sector.

“But our food-led approach – which offers people the chance to enjoy a combination of restaurant-quality food in relaxed pub surroundings – has allowed Oakman to perform strongly in terms of like-for-like sales, giving us great confidence in the future.”

Downing Crowd Bonds are a type of investment-based crowdfunding which allows investors to lend directly to a wide range of UK businesses via bonds that are secured against a firm’s operational assets.

This seeks to reduce investor risk by enabling Downing to sell these assets if the borrower defaults on the bond.

Julia Groves, head of crowdfunding at Downing Crowd (pictured above), said it only invests in established UK businesses and already has expertise in the UK pub sector having provided £85m of funding support to 60 pubs and restaurants over the last 15 years.

“Over the last five years in particular, Downing has seen a huge improvement in the quality of pubs in the market and it’s the wealth of sector experience that Oakman Inns brings to the company which really sets this particular business apart.

“Over a million people have now invested through a crowdfunding platform in the UK but, despite its growing popularity, the different kinds of crowdfunding tend to all get labelled as ‘extremely risky’.

“In fact, crowd bonds are a simple type of securitised investment and – provided investors fully understand the relevant risks compared to savings accounts – they can potentially offer attractive returns in the current climate of low interest rates and rising inflation.”