If you smell a (dead) rat, there usually is a dead rat.

I have twice in my life owned thatched cottages. They look great, are well insulated and a bit quirky. But the roofs are teaming with wildlife, especially rodents.

Now if the sound of mice and rats running around on your bedroom ceiling starts to get to you, you turn to methods of elimination, or to be realistic, suppression. That usually involves poisons and the problem with a poisoned rat is that it dies slowly and it can crawl up and die in your roof. That is a sort of revenge, post mortem. You will know the dead rat is there, pretty soon. The appalling smell will tell you. How long it takes you to find the corpse will be a variable.

What my repeated experience of this aspect of country life told me was that if you think you smell a dead rat, there always is a dead rat.

I make this point because sometimes I come across an investment in someone’s portfolio that looks to be too good to be true. I investigate it in the way I suggest everyone does in my article on screening for funds – using Google and reading everything you can find that cross references the fund, the management group and the manager.

Sometimes, there are hints of unusual investment strategies, assets that can’t easily be valued and ‘charismatic’ personalities. These are for me rat-like odours.

I recently checked out a bond fund run by a London based asset management company that has not been around that long. The fund had delivered exceptionally good results. The fund management house is associated with a large French bank, so looks solid.

The problem is that the management group seems to like investing in private loans to the businesses of effectively just one individual, who has a far from pristine track record for paying the money back. Furthermore, the fund manager and this person seem to have a close personal relationship.

On top of that, it is accepted that these private debt assets are illiquid and that their value is somewhat ‘notional’. The fund has been closely scrutinised by an experienced financial journalist, prompting a defence pointing out that it has plenty of more conventional liquid assets and no plans to restrict withdrawals.

I think the smell is too strong for me to be tempted by the remarkable returns and awards cabinet of the fund manager. I may be completely wrong, but investing here is one risk I would not be taking.