Bolton Wanderers bond scheme - Here is everything you need to know

Nearly four years after Football Ventures completed their dramatic last-minute takeover, pulling the business from the brink of liquidation, they have reached a point of financial stability that hardly seemed possible when they walked through the door.

External debts have now been paid, the complex web of charges and legacy payments now obliged, Wanderers are now looking to the future with optimism.

Depending on how Ian Evatt’s side fare in the play-offs, which kick off on Saturday against Barnsley, the Whites could be playing Championship football in August, watched by a post-Premier League record number of season ticket holders. And with that in mind, the owners have decided to use the groundswell of positivity to launch a £4million bond scheme intended to accelerate progress in the coming years.

WHAT ARE THE CLUB ASKING?

Fans and investors are being offered the chance to buy a retail bond, starting at £500 and in increments of £500 thereafter, but with no maximum limit.

Each investment will see a return of 8.5 per cent each year on the anniversary of purchase, before being paid back in full after five years.

There will also be a 10 per cent bonus, payable if Wanderers compete in the Championship from the 2024/25 season.

Should the club be sold then all investments plus interest accrued will be repaid in full.

HOW MUCH DO THE CLUB INTEND TO RAISE?

The initial target is £4million. Leading sports advisory and capital solutions firm Tifosi are working with Wanderers to present the bond scheme having worked with several other clubs around Europe on similar projects. Norwich City sought to raise £3.5m with a bond scheme launched five years ago to raise money for their academy. They achieved £5m and it has now been repaid.

Peterborough United hit their maximum threshold of £2.5m when their bond was released in May 2022, with the funds used for safe standing areas and a sports bar. That has also paid its first bout of interest with a second due later this year.

QPR’s offer – which at £6.8m became the largest online bond in British football – raised £6.8m in just 10 days and is set to make its first payment.

Wanderers have set their bar at £4m, although there could be capacity to increase that number should the demand exist.

“We are being really transparent with everyone,” said Wanderers chief executive Neil Hart. “We’d like to get to that number but if it is less, then okay, if it is more, then great.”

WHAT IS THIS MONEY BEING USED ON?

Football Ventures will continue to invest money into Wanderers – the bond scheme will NOT replace that – but the funds raised will enable the club to accelerate progress on several capital projects which they believe can push the club forward, on and off the pitch.

Neil Hart explained: “Money raised will be focused into two areas; the first has been termed Sporting Enhancement and will include improvements to data and recruitment, pitches at the Lostock training ground and the sports science and medical facilities.

The second, Infrastructure Projects, include improvements to the Fanzone, concourses, hotel, wi-fi in the stadium, and hospitality suites.

Being able to improve corporate offerings on a matchday, say the club, will be worth more than £500,000 per season.

“Everything we are trying to do,” says Hart, “is to turn a further profit and put the club on a stronger foot going forward, financially.”

WHY ARE WANDERERS DOING THIS NOW?

Football Ventures board member Nick Luckock said that the timing of the offer was partly to enabled the funds to be used in the manner they are intended, and also that the club is in the right financial state to be able to offer this kind of investment opportunity to the wider public.

He said: “There are a few reasons; firstly there is some infrastructure investment that we are planning for this summer and that can only be done at this time of year, it’s a practical reason.

“Secondly, of course, we want to invest in the playing squad and I don’t know what will happen over the next three or four weeks but we should be prepared for that.

“The third is that on the journey we have been on so far we now feel like we have reached that point in maturity and trust that we can actually go and ask people for their hard-earned cash, offer them an attractive investment opportunity. But at the end of the day, they are placing their trust in us. It felt like it was the right time.”

WHY AREN’T THE OWNERS JUST PAYING FOR THIS?

Football Ventures have – and will continue to - fund Bolton Wanderers. But having converted all the money they have put into the business so far into shares (equity), they now feel the business is robust enough to handle such an offer.

It is hoped that by injecting money this summer in key projects around the stadium and training ground, that the investment will then give Wanderers a better chance to make money further down the line, and for Evatt’s team to succeed.

“We spent the last three years dealing with, let’s call them the legacy debts, which we have done. We have no third-party debt as of today,” Luckock said.

“Providing an investment where we can generate a positive return – in all sorts of ways, whether it is commercial, for the supporters or the players – feels like the right thing to be doing at this point in time, a partnership with those potential investors.

“At the end of the day, the cost of money is lower than the cost of equity and so from a finance point of view we think it is right to have a small mix of debt alongside all the equity that has been invested. This is a small proportion of the capital that has gone into Bolton Wanderers.

“People may have noticed that we have converted everything we have invested into equity, so the balance sheet is completely clean. We are not asking our supporters for something we don’t think is an attractive financial instrument and therefore providing a subsidy, we think it is a good financial opportunity for investors. But it is a football club, a hotel, it is an entertainment proposition, so people have to trust us that we will respect their money.”

IS THIS GOING TO BE A REGULAR THING?

Whilst Wanderers would have the option to issue another bond scheme further down the line, Nick Luckock says it is not in Football Ventures’ plan.

“It is unlikely we would do one again,” he said. “The financial profile of the group is that equity is the more appropriate source of funding. As we have matured our revenue base and all the commercial benefits of Neil’s leadership have come through we feel that the strain on the business is reducing materially, and one of the reasons we have made investment into hospitality and connectivity etc, is that it gives us more opportunity to make financial returns for the group, therefore reducing the equity strain on the business.

“Constantly pouring money in does not feel like the right way for Bolton Wanderers to be run over a long period of time.

“What Football Ventures have been funding is firstly the legacy issues, secondly the repair of the club, and then finally the working capital of a business that went through a pandemic which, as you can guess, was not part of the business plan.”

WHAT ARE THE RISKS?

Tifosi are overseeing the bond scheme for Wanderers and are governed by the Financial Standards Authority.

Chief digital and marketing officer Mrinal Sinh-Smith explained that Football Ventures business plans and finances had been checked before the company decided to partner Bolton Wanderers, and that they are comfortable that the club can expect to make repayments.

However, Mr Sinh-Smith urged any potential investor to check all the available details before making a decision and to recognise – as with any offer like this – there are risks as well as rewards.

He said: “Where we feel a club has the financial maturity to take on this kind of product and also the community to achieve those targets, we are happy to work with them.

“We undertake a certain amount of responsibility ourselves to do due diligence on the clubs we work with, and make sure that whatever information is prepared and shared at the time of the offer is fair and true. As long as we feel the club can sustain the level of debt, and having met with the board and leadership at Bolton we feel comfortable with that and their commitment, then we will work with them. There have been occasions where we have not felt that with other clubs.

“It is an investment product and there is risk inherent to it, as with any investment. Any individual considering this should be familiar with this, and those risks will be made very clear on the investment pages on the Tifosi website, and, crucially, the offer document.

“It is crucial that the individual looks at those risks and is comfortable with them, and part of it is whether we look at the ownership and leadership of this club and ask: ‘Do I trust them?’”

HAVEN’T WE BEEN HERE BEFORE?

Those with longer memories will remember share issues from the club’s former parent company, Burnden Leisure Limited, which ultimately became worthless when Eddie Davies took majority control in 2003.

Bonds are different to shares. Whereas shares give you a stake in the company – and their values can fluctuate according to lots of different factors – the aim of a bond is to provide a profit for the person investing the initial stake.

In this case, there is an interest payment for five years and then the original stake (£500 or more) is refunded, along with a 10 per cent Championship bonus.

There is no such thing as a sure thing. Football Ventures are asking for supporters and investors to trust their plan for the club – but whomever puts their money in must do so with their eyes open.

DO WANDERERS EXPECT A BIG UPTAKE?

Similar schemes have done well, and Tifosi also have a portfolio of investors who have been interested previously, so they estimate that between 20-30 per cent of the money that comes in will be from ‘outside’ the Wanderers remit.

The club has stressed that money raised by the bond scheme will NOT be in lieu of investment from the owners, and rather help to progress the club’s profit-making capability quicker than if they had continued in the same way.

Football clubs outside the Premier League are largely reliant on ownership funding and – ultimately – there have been many cases where that has caused problems, as Wanderers fans know only too well.

“It is not easy running a football club, there are a huge number of costs, on and off the pitch, to make it work and make it competitive,” said CEO Neil Hart.

“This is a completely different football club to the one when Sharon Brittan and Football Ventures walked through the door. The growth in the business over the last two years since I have been here has exceeded my expectations.

“We feel the launch of the bond will give supporters and investors a chance to get involved in that journey. And we think the appetite is real.

“We have a stable investor base portfolio behind the board, and they will continue to invest in this football club – and that will continue over the next few years as we continue this journey.”

HOW DO YOU BUY ONE?

For more information on the Wanderers Bond and to receive priority investment access, visit HERE to pre-register now. Pre-registration is open for one week.