British Expats Hit by Godwin Capital Loan Note Collapse

Godwin Capital was linked to property developer Godwin Developments and raised funds from investors through loan note investments.

Loan notes are a form of debt investment, where an investor lends money to a company in return for a promise to repay the money with interest at a later date. The Financial Conduct Authority (FCA), the UK’s financial regulator, issued a warning in 2025 about loan notes (also called mini bonds), calling them high-risk, unregulated investments.

Godwin Capital loan notes were reportedly promoted as property-backed investments, with investors told that their money would be used for UK property developments and that the loans would be secured against assets.

For many investors, especially those living overseas, these claims can sound reassuring, as UK property may feel familiar, tangible and relatively safe compared with other investment options.

However, property-backed does not necessarily mean safe. Investors can still lose money if the project fails, the company runs out of money, the property is worth less than expected, or the promised security does not actually protect them.

Bisnow reported that Godwin Capital No.8 raised £155m, and that investors across Godwin companies contributed around £162m between 2019 and 2024. So far, it is thought that the administrators have identified only £4m to £5m in assets, leaving investors facing the prospect of a very limited recovery through the administration process.

A Ponzi scheme is generally understood to be a fraudulent investment arrangement in which returns to earlier investors are paid using money from newer investors, rather than from genuine profits or sustainable investment activity.

Godwin Capital remains subject to ongoing administration, investigation and legal proceedings. A freezing order does not, by itself, mean that allegations have been proven, and investors should be cautious about assuming that a Court has already made final findings about how the investment operated.

However, Bisnow reported that an initial administrators’ report found that investor funds were not secured on properties in the way investors had been told, and that some money raised from later investors was used to repay earlier loan notes. Those are important issues for investors considering what happened and whether other parties may have responsibility.

Many British nationals living overseas rely on advisers, introducers or international networks when making decisions about pensions, savings and investments. If the investment later fails, it is important to examine who was involved, the role they played and what the investor was told at the time.

Holborn Assets was one of many firms that introduced or advised investors on Godwin Capital loan notes. Other investors were brought in through introducers in the Middle East, Southeast Asia and South Africa. Reports have described Dubai-based Capital 3PM as acting as a bridge between Godwin and financial advisory firms, particularly in the Middle East, where many British expat investors were based.

Capital 3PM is believed to have sourced financial advisory firms and individual introducers, promoted the loan notes, found investors itself in some cases and, when people agreed to invest, sometimes handled the paperwork.

According to an unnamed source with knowledge of the structure, Capital 3PM was paid a 20% fee on the funds it helped raise. Bisnow also reported that introducers competed on internal leaderboards, with top performers offered incentives, including a Tuscany trip in supercars.

Commission arrangements are not automatically unlawful; however, they can be highly relevant in investment loss claims.

If advisers or introducers were being paid significant commissions, investors may want to know whether those payments were disclosed, whether the incentives created a conflict of interest, and whether the product was promoted because it was suitable or because it was financially attractive to those selling it.

This is particularly important where the investment was presented as secure, asset-backed, property-backed or suitable for ordinary retail investors.

Before recommending or promoting a high-risk investment, advisers and firms should understand the product, how it works, the risks involved, and whether it is suitable for the person being approached.

In a property-backed loan note case, proper due diligence can involve checking the company structure, the underlying property projects, security arrangements, the ranking of creditors, cash flow assumptions, commission arrangements, regulatory status, and whether the promised returns are realistic.

If investors were told their money was secured against property, there may also be questions about what checks were carried out to confirm that the security existed, was properly documented, and would actually protect investors if the company failed.

Where those checks were not carried out properly, an investor may have been exposed to a level of risk they did not understand and would not have accepted if the position had been properly explained.

British expats may assume that living overseas makes it harder to bring a claim. In some cases, that can be true: jurisdiction, regulation and the adviser’s location can all affect the options available.

However, living overseas does not automatically mean there is no route to recovery.

A claim may still be possible where there is a UK connection, such as a UK pension, a UK bank transfer, a UK-regulated adviser, a UK SIPP provider, a UK company, or an investment promoted as linked to UK property developments.

Where a regulated financial adviser recommended the investment, there may be grounds for a complaint about unsuitable advice. If pension funds were used, the role of any pension adviser, SIPP provider or pension provider should be considered. If large payments were made through a bank, there may be issues over whether the bank should have identified warning signs before allowing the transfer.

If an investor was persuaded to transfer money as part of a misleading or fraudulent investment opportunity, a bank negligence or APP fraud claim may be worth considering, depending on the facts. APP fraud (Authorised Push Payment fraud) typically involves someone being tricked into sending money from their own bank account to another account.

Some cases may also involve professional negligence, civil recovery, private prosecution or other legal routes. The right option will depend on the evidence, including the advice given, the documents signed, the payments made and the regulatory status of the parties involved.

A possible claim will depend on the individual facts, including how the investor came to invest, who was involved and what they were told.

There may be grounds to investigate a claim where pension money, retirement savings or an inheritance were invested following advice from a regulated adviser, or where an adviser or introducer failed to explain the risks adequately.

A claim may also be worth exploring where the investment was promoted as secure, property-backed or low risk, but the security was not properly in place or did not provide the protection the investor had been led to expect.

Other relevant issues may include undisclosed commission, unsuitable advice, inadequate due diligence, misleading statements about the investment, or bank transfers that should have raised concerns given their size, timing or circumstances.

These issues do not guarantee that a claim will succeed. They do, however, emphasise the importance of reviewing the full paper trail before assuming that the administration process is the only possible route to recovering money.