6 Month Results (MLA Account With Cash Sweep to QAA Only)
The first 6 months results of investing through the Assetz Capital platform are as follows –
Expected ROI (Annualised)
Actual ROI (Annualised)
The ‘Expected ROI’ figure is taken from the dashboard readout as the average rate across all loans invested in. The ‘Actual ROI’ at 5.66% is a little underwhelming to say the least. In this 6 month period I would say Assetz have displayed one of the most impressive loan generation rates I have come across. Unfortunately though with volume of loans comes volume of late payments and problematic loans. I would say Assetz have displayed a considerable level of vigilance in dealing with problematic loans, despite carrying so many loans they have been very quick to suspend trading of loans when problems arise and for the most part late payments are rectified within a few weeks.
Cash drag has been a bit of an issue when assigning funds to loan offerings too. It can take anywhere from 12-36 hours for allocated funds to be accepted to an existing loan. A new loan can take longer as it needs to be filled before being activated. That said Assetz do operate a sweep function which ‘sweeps’ idle and awaiting allocation funds into the Quick Access Account (QAA) where in earns 4.10% pa. So it doesn’t really explain the deficit, even when considering the relative infancy (account rollup) of the account I still would have expected to see a rate closer to 7.00%.
The Assetz Capital platform also like to run ‘Cashback’ promotions and in this period they ran a promotion called the ‘Summer Holiday Cashback’. Essentially they offer an additional 1.00% cashback on newly lent funds either within a set deadline or to a set total pot of funds. As a big retailer might say ‘every little helps!’
A new Assetz Platform
Assetz Capital have announced the launch of a new platform, Assetz Exchange. The platform will focus on equity offerings in Buy to Let and Homes of Multiple Occupancy. Investors will buy shares in a property with a hope for future appreciation in the property/share price alongside receiving a rental dividend. The platform is due to launch in early 2019. I will publish more on this in due course.
I’m relatively happy with my experience of Assetz Capital so far, the company seems to be a professional, competent and well run outfit. The loan offerings are of a relatively higher quality then some other platforms. I’m a little mystified by the wide deficit in the ‘Expected’ and ‘Actual’ rates but it’s too early to draw any definite conclusion as to the cause. So Assetz will remain in my portfolio for now and I will look to increase my holding with them in the short term.
The first 6 months results of investing through the Ablrate platform as as follows –
Expected ROI (Annualised)
Actual ROI (Annualised)
The ‘Expected ROI’ figure on this example is taken from Ablrate’s own marketing material (an average of 10-15%). The ‘Actual ROI’ looks bad but there are a few things to factor in, firstly I utilised the secondary market place for most of my buy-in’s to loan parts inataily. Ablrate offer a premium/discount secondary market place with a small transaction fee. Some of the loan parts were bought at small premium too when considering their relative position in the returns cycle. So the returns for the first couple of months of my account were actually negative. If I was to exclude those factors I think the the returns would be much closer to the ‘Expected ROI’ figure.
Also within the first 6 month period turbulence was experienced in respect to specific loan repayments. I’m not inclined to discus specific loans but the kind of turbulence experienced included, late payments, missed payments and ultimately a number of loans being suspended. While problems are to be expected with-in the P2P lending sector, what really matters is a platforms ability to remedy those problems. Over the period I would say 20.00% of my loan holdings have had problems but half of those were brought back on track, the other 10.00% have been adequately updated and are within weeks of a proposed remedy. 10.00% problematic loan parts are about in line with what to expect across the lending sector so not a major concern.
My only slight disappointment with Ablrate so far is that their loan origination is one of the slowest I have come across. Meaning minimal diversification (1% or lower in each loan) is neigh on impossible within a reasonable length of time. Unless you utilise the secondary market (which I did) but that costs returns upfront. Of course the positive spin is they are taking longer in offering decent quality loans, which I recognise. The loan offerings I have looked at seem to be a higher quality compared to some other higher volume platforms.
By the end of this period completed loans were in excess of £42’000’000, interest paid to borrowers was over £5’200’000. Ablrate announced the intention to launch a funding round via the CrowdCube equity platform at the start of 2019, more to follow on this in the next results update.
I really like Ablrate from what I have seen so far, they seem like a well run platform full of quality professionals who seem to take their responsibility for lenders money seriously. Loan generation is a bit of a let down but I accept it in exchange for an improved level due diligence and loan quality offering. As far as my portfolio goes the traditional parameters I apply of returns over time are restricting further deposits right now. So yes deposits will be increased but it’s just a case of when the realised returns are high enough to allow it.
The results for lending through Funding Circle over the past 18 months are as follows –
Expected ROI (Annualised)
Actual ROI (Annualised)
The ‘Expected ROI’ is taken from Funding Circles own marketing material. The ‘Actual ROI’ has come in significantly higher. The ‘Expected’ figure takes into account a predicted level of defaults, I only had one loan part in the 18 months ‘downgraded’. This meant the loan part in question issued a warning of possible problems with repayments, despite this the loan part still made and is continuing to make repayments, so I think I have lucky with my account performing above average, which explains why I’m currently running over 1.00% above Funding Circles own predictions. This of course is likely to change as loan holdings mature and the likelihood of missed repayments increases.
The other big news for Funding Circle in this 6 month period since the last results, is the conformation of it’s IPO. Due to launch in October 2018 this IPO is highly anticipated as being the first P2P company to IPO in the UK. Other IPOs for P2P companies have previously taken place on the other side of the pond with concerning results. Lending Club IPOd in 2014 with it’s share price dropping 30% within weeks, in now trades (09/2018) at a huge 85.00% discount on IPO price. A similar pattern is being expected by many financial analyst for Funding Circle.
Funding Circle is doing more than enough in both terms ‘Actual Returns’ and future prospects of continued returns to maintain its position as an integral part of my portfolio.
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Assetz Capital is a P2P lending platform offering both property and business loan opportunities. Founded in 2012 it’s total lending to date is now in excess of £350 million. The minimum deposit for Assetz is £10 with a minimum loan part of £0.01. Deposits are made by bank transfer only and usually clear within 3 business days. Loan terms are generally between 12 and 60 months.
Assetz offers 5 different accounts to customers –
Property Secured Account (PSA) – Target rate of return 5.50% per annum, monies secured against a fund of UK based property loans. Monies are auto-assigned and withdrawal is only available on the condition of a buyer being available at the time.
30-Day Access Account (30DAA) – Target rate of return 5.10% per annum, monies are auto assigned to both business and property loans but require 30 days notice for a withdrawal dependant on market conditions. This account is also backed by a discretionary provision fund.
Quick Access Account(QAA) – Target rate of return 4.10% per annum, monies are withdrawable (to your cash account) immediately depending on market conditions. Funds are lent against both UK business and property loans.
Great British Business Account(GBBA) – Target rate of return 6.25% per annum, monies are auto-invested exclusively in to British Business loans. This account is also backed by a discretionary provision fund, withdrawal times can vary widely dependent on market conditions.
Manual Lending Account(MLA) – Available rate of return up to 10.00% per annum, this is a traditional self select account, you choose the deal you want to lend to and how much you want to lend. Loans are available to both UK business and property.
The Assetz accounts also offer a ‘Cash Sweep’ function. This means you set any usassinged monies to be swept in to the ‘Quick Access Account’ earning the target rate of 4.10% per annum while you wait for repaid funds to build before making a new investment using the funds from the QAA, minimising cash drag.
Assetz are also authorised to offer an IFISA option meaning £20’000 can be invested a year tax free. Assetz Capital are fully regulated by the FCA.
Ablrate was established in 2014 as business focused P2P lender. It offers asset backed loans in property, capital equipment and eco- projects. The minimum initial deposit for Ablrate is £100 (via bank transfer only) with a minimum loan deposit of £1. Loans are either ‘interest only’ or ‘amoritising’. Ablerate advertises a lender return of 10-15% annualised. Ablerate is fully authorised and regulated by the FCA and gained its IFISA permission from HMRC in August 2017.
Ablerate also offers a secondary market place for early loan part disposals. It works on a premium/discount offering meaning a seller can sacrifice some interest rate while a buyer picks up a higher interest rate to reflect the risk exchange.
Ablrate has a modern, clean looking dashboard that displays everything you need to know about your current portfolio.
The top box – shows a headline figure for any new loans available on the platform, clicking browse now will take you a details page.
Cash Balance box – shows any unassigned funds as ‘Funds Available’ these can be withdrawn immediately (minimum loan assignment is £1 and in whole pounds thereafter). This box also shows your ‘Total Fund’ balance. This is all of your active loans plus ‘Pending Loans’, plus ‘Funds Available’ on Ablerate.
Invested Funds box – this is your balance currently assigned to active loans, any balance assigned to loans not yet activated is shown as a separate figure under ‘Pending Loans’. Ablrate do not pay interest on ‘Pending Loans’.
All Interest Earned box – shows your interest to date. This figure can be a little misleading as it includes interest earned on held loans, cashback and interest on sold loans, hence why the figure does not tally up with the total funds balance. This box also includes ‘Next Payment Date’ and ‘Next Payment Amount’ while this is a handy metric, unfortunately if you experience a non payment on a loan the figures get stuck until that late payment is made, making the figures next to useless.
Secondary Market box – this displays any bids or offers you currently have on the secondary market place. When you bid (to buy) a loan part your bid is entered into a list with most attractive bid ranking highest. The same is true when offering a loan part for sale. The quicker you want to sell or buy loan part the closer you need to be to the best either offer or bid. If you don’t mind waiting for your bid or offer to be matched you can set it a little further away from the optimum meaning you can protenital make a better return for waiting a little longer. As with all secondary market places sale availability is subject to market conditions.
Growth Street Exchange Limited (full name) is a UK based, business focused P2P lender launched in 2015. The minimum deposit and minimum loan part for Growth Street is £10, made via bank transfer only. Current advertised annual return is 5.3%.
How Growth Street works is interesting, once a deposit has cleared you place an order on the market for the deposit to be assigned to a loan (Growth Street is ‘black box’ in nature so it chose the loans for you although you can view more detail on a loan once it’s been assigned) . All loans however are on one month rolling contracts. This means your deposit plus interest is redeposited back to your account balance at the end of the month, to be re-instructed for lending on new loan. This effectively means a total account closure/withdrawal could be performed in as little as a one month. This potentially makes Growth Street one of the most liquid P2P offerings on the market to date. Worth noting this is excluding the effects of defaults, which would be ‘unsellable’.
Growth Street does not offer a secondary market place so you are tied in for at least the month of the contract.
Growth Street Summary Page
Money On Loan – shows the total balance currently assigned to loans.
Money On Market – shows the any open orders awaiting loan part assignment.
Holding Account Balance – shows any funds not yet on loan or queued for lending, with a minimum loan part of £10, cash drag is a factor with Growth Street. These holding balance funds can be withdrawn at anytime.
Current Interest Accrued (Unpaid) – is the outstanding interest on live loan part that should be expected with-in the next four weeks.
Interest paid to date – is the total interest paid on the deposited balance excluding accrued interest.
To perform a total account withdrawal you will first need to turn off the ‘Reinvestment’ instruction, accessible from the top right dropdown menu on the main website.
The first 6 months results of investing through the Money Thing platform are as follows –
I have calculated the ‘Expected ROI’ for this platform as an average between the stated rate of return, ’10-18%’ average being 14% and I have factored in the frequency of these returns level offerings, there is currently (1/09/2018) only one 18% offering out of 100 live loans so I have revised the average down to 12% accordingly.
As you can see the ‘Actual ROI’ is currently 8.22%. One of my loan holdings became ‘Non Performing’ in this period meaning the loan is either not paying interest as expected or at all . Cash drag is a factor too, a minimum of £1 buy in’s means you pretty much always have residual pennies on account, coupled with a relatively slow new loan generation (currently one about every 10 days), I’m actually quite happy with current ROI. There have been no other major platform developments to report at this time.
I have no reason to consider dropping Money Thing from my portfolio at this time, in fact based on ROI it’s currently one of my strongest performers. Loan generation could be quicker but at least they are assessing loan applications with adequate time and thoroughness.