Should you go from fan to financier? AFC Wimbledon raises £3.5m

Economics teacher Cormac van der Hoeven does a fair imitation of a Cockney market trader.

‘Get your Plough Lane Bond!’ he yells at confused bankers at Canary Wharf Tube station. ‘Help AFC Wimbledon return home!’

But the bankers aren’t biting.

Cormac, 32, is trying to raise £5 million to help his club play at Plough Lane in Wimbledon, South-west London, for the first time since 1991.

Financial goal: AFC Wimbledon fans Cormac van der Hoeven, left, and Rob Lowe, right, target City workers after launching a bond to try to raise money to fund the club’s new stadium

If successful, it will equal the biggest bond scheme in English football history. Investors can put in anything from £1,000 and can choose annual returns of up to 4 per cent over five, ten or 20-years. It is hoped many will choose a lower rate to help the club.

‘Most people who stop to talk have a Wimbledon connection,’ Cormac admits. ‘But the returns are genuinely competitive.’

So does it pay to invest in football, or is it only ever a fans’ folly?

Other schemes have had varied success. In 2018, Norwich City raised £5 million to build an academy.

The Canaries Bond offered 5 per cent gross annual interest — and investors were paid a one-off 25 per cent bonus after the club went up to the Premier League last season.

But investors in a similar Bury FC scheme are expected to lose all their money after the club collapsed last year.

A scheme launched by West Ham in 1991 to fund the redevelopment of its ground sparked pitch invasions from fans furious at being asked to buy bonds in return for season tickets. The bond was wound up after poor sales.

The Plough Lane Bond, though, was set up by The Dons Trust, the fan group that owns the club.

Coming home: An artist's impression of the new AFC Wimbledon stadium being built on the site of the old Greyhound stadium close to Wimbledon FC's old Plough Lane ground

Coming home: An artist’s impression of the new AFC Wimbledon stadium being built on the site of the old Greyhound stadium close to Wimbledon FC’s old Plough Lane ground

Their pitch is drenched in emotion. In 2002, the old Wimbledon FC — a club that caused one of the greatest upsets in British football by beating Liverpool in the 1988 FA Cup final — faced bankruptcy. 

So the board moved the club 60 miles north to new town Milton Keynes, rebranding it as MK Dons. Enraged, fans founded a new team with two aims: to return to the Football League — and to Plough Lane.

Almost 20 years and six promotions later, the club sits one place below MK Dons in League One.

In 2017, the club got permission to build a new stadium at Plough Lane, but last December fans were told they faced an £11 million shortfall. 

Three investors were prepared to put £7.5 million in for a 30 per cent stake, but that would see fans lose control of their club.

It is hoped the £5 million bond scheme will clear the way for a commercial lender to step in with the additional £6 million. So far £3.5 million has been raised — the club must find the rest by Friday.

Winners: (L-R) Eric Young, Lawrie Sanchez, Dave Beasant and Terry Phelan of Wimbledon celebrate with the FA Cup  after beating Liverpool 1-0 in the 1988 final

Winners: (L-R) Eric Young, Lawrie Sanchez, Dave Beasant and Terry Phelan of Wimbledon celebrate with the FA Cup  after beating Liverpool 1-0 in the 1988 final

Xavier Wiggins, 48, helped launch the bond. He says the average investor chooses a 2 per cent return over eight years, friendlier terms than the club would get from a bank.

The best easy access rate now is 1.35 per cent with Goldman Sachs.

Back in Canary Wharf, Cormac has a potential investor. Barclays worker Elliott Ghent, 21, says: ‘The interest rates are slightly lower than from a purely economic investment but when you combine it with the community element it does have appeal.’ 

Elliott lives in Battersea, South London, but he grew up in Wimbledon.

Meanwhile, Jamie Newell, 52, a West Ham fan who lives in Bath, has invested £10,000 in return for 4 per cent over ten years. 

He says: ‘That money would normally just be resting in an easy-access account, but this bond’s rate is far better.

‘The investment does come from my love of football. For me there are two romantic stories in the game: West Ham winning the World Cup in 1966 [heroes Bobby Moore, Martin Peters and Geoff Hurst played for the club] and Wimbledon’s ‘Crazy Gang’ winning the FA Cup. I’d love to see them back at their old ground.’

Tom Selby, senior analyst at AJ Bell, says while a 4 per cent return seems attractive compared to cash savings accounts, it comes at a risk.

He adds: ‘There are many issues to think long and hard about but for some supporters these may be secondary considerations. 

They may want to invest to support the club but should only do so if they can afford to lose their money if the club gets into difficulties.’

Buying shares in a publicly listed club could be a safer bet. Fund manager Nick Train invests in three ‘icons’: Juventus, Celtic and Manchester United.

A £100 investment over five years would have returned £539.85, £196.05 and £118.25 respectively.

But Adrian Lowcock, of Willis Owen, says Train’s funds are diversified — investors shouldn’t pile all their cash into one club.

Xavier, meanwhile, has just one goal in mind. ‘The dream for misty eyed 40-year-olds like me is just to go back to Plough Lane, and to Wimbledon,’ he says.


Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Source link