Lendy Enters Administration

Lendy Administration

It was announced late in the evening on 24/05/2019 that the P2P lending platform Lendy Ltd has entered voluntary administration. On a statement on the FCA’s website it has also been announced that the FCA themselves will run an inquiry it what caused the collapse of Lendy Ltd. The administration covers the three core companies of the Lendy platform: Lendy Ltd, Lendy Provision Reserve Ltd and Saving Stream Security Ltd. There are at least three other companies associated with the director of Lendy that are not covered by the administration. 

Many Lendy investors will see this administration as a realisation of the inevitable. Lendy has been in serious trouble for over 12 months, following a catalog of incoptenacies and miss truths it had all but destroyed confidence and support from its core lender base. This resulted in the secondary market place grinding to a halt, effectively locking in investors to loans. On the 11/03/2019 it was publicised that Lendy had been put on the ‘FCA’s Special Watchlist’ since January 2019 as concerns were growing about its ability to meet the minimum regulatory standards. Then on the 23/04/2019 Lendy notified lenders via it’s platform that it was experiencing banking issues, shortly after the FCA announced it was imposing further restrictions on Lendy’s operations. Lendy consistently claimed the banking issues were a technical issue and it was being resolved, however many lenders who are aware of how Lendy operates and the little regard it has towards it’s lenders, possessed the capacity to assume that these too events were inextricably linked, regardless of what Lendy claimed.

Other issues with the Lendy platform included, wildly over valued properties (which personally I hope will be looked into as part of the FCA inquiry). An almost total ineptitude/unwillingness/unpreparedness to handle and resolve problematic loans and recover securities. A seeming endless stream of monthly loan updates that in time proved to be irrelevant and non representative of the reality. A revolving door of staff appointments, particularly a number of high profile six figure appointments that seemed to last mere months. The threat of a direct legal action against the platform and all borrowers to the associated loans (that legal action has recently been thrown out of court, for being baseless).

For now the website remains live, I advise anybody who has not already done so to screenshot their loan holdings, account balance and download the Excel file while you still can.

Many Lenders have filled formal complaints to both Lendy and the FCA over the last 12 months so there is hope that the truth can be easily uncovered by the inquiry, however losses should be expected. On a personal note I am very fortunate that I have not lent new money through the Lendy platform (as published in a previous post) for sometime so my exposure is minimal, but my heart goes out to those that are significantly exposed especially those that have pension size investments tied up in this administration. Even worse are those lenders tied up in the Collateral UK fiasco too, (for I am too). This is the second sizable P2P platform failure in 12 months, Collateral UK circa £20 mil loan book, Lendy circa £200 mil loan book value. I have no doubt that this latest P2P platform collapse will force the wider P2P industry and the regulator to look in the mirror once again and ask what is going so wrong for this to keep happening.                                           

Landbay – 18 Month Results

18 Month Results

The results for lending through Landbay over the last 18 months are in and they are as follows –

Expected ROI (Annualised) 3.56%
Actual ROI (Annualised) 3.56%

The ‘Expected ROI’ is ratioed at just over half of the balance on an earlier 3.69% fixed rate and the later 3.49% fixed rate offering. As you can see Landbay delivers bang on expectation for the 2nd time in 3 reviews they’re nothing if not consistent. Other than that there’s not really a lot to say. Not the most exciting platform by any stretch and the rates are the rates, marginally better than a one year saver although at least you can build monthly compound with Landbay.

There’s a recalculation of LIBOR due in January (Landbay recalculate LIBOR on a 3 month average) so I would expect the tracker rate to increase slightly, it’s usually around LIBOR plus 2.50%. I can’t imagine it would go higher than the fixed rate right now though.

Company News

At the time of this review Landbay were approaching £250’000’000 in total mortgage lending since they started life in 2010. This is made up of approaching 900 mortgages, c50.00% of which are in London. Landbay has still maintained it’s nil default record to date, an accolade that is increasing rare in the wider P2P sector. There are some whispers of a further crowdfunding round in the offing although it has not yet been confirmed, if it goes ahead it will be Landbays 11th funding round.

Conclusion

Landbay is one of them fire and forget platforms that gets on with the job without fuss and just like a (non UK) train arrives on time every time. The price you pay for consistency and convenience is reflected in the lower end rate on offer compared to the wider P2P sector. So Landbay will remain in my portfolio as a relatively sound foundation to the riskier but higher potential reward platforms I lend through.

Referral link for Landbay

This link provides a referral bonus of £100 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

Brickowner – An Introduction

Introduction

Brickowner was launched in early 2017 offering retail investors the chance to invest in a slice of an institutional property investment opportunity. These kind of investments are traditionally beyond the reach reach of the smaller retail investors with a typical minimum buy in at £25’000 upwards. With Brickowner you can invest from as little as £100.

Brickowner is structured to working with experienced and established property developers and asset managers. These more experienced partners bring with them the access to these larger institutional investment opportunities. Brickowner operates as an appointed representative of Gallium Fund Solutions Ltd, who is fully authorised and regulated by the FCA in the UK.

Brickowner typically charges an upfront fee of 3.00% when investing in an opportunity although fee structure can vary per property (please check the specific property term sheet before investing in an opportunity). If a 3.00% charge is applicable, it’s inclusive, meaning if you invest a minimum of £100 you will actually invest £97 paying a £3 fee.

Brickowner currently does not operate a functionable secondary market place so an early exit is generally not possible. Deposits can be made via debit card (instant) or bank transfer (typically 3 working days).

The Property Page

Screen Shot 2019-02-02 at 09.01.22
A sample of the Brickowner property page

Brickowner can offer two types of return on an investment opportunity. An income payment typically received per annum throughout the duration of the project and/or a completion payment once the project is finished. For Example the ‘All Saints’ project offers a 5.00% income payment over 4 years (20.00%) plus a completion payment of 20.00%, totaling 40.00% over 4 years (or 10.00% per annum).

Referral Link For Brickowner

This link provides a referral bonus of £100 when a new customer signs up and invests £1000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.        

Assetz Capital – 6 Month Results

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) 8.75%
Actual ROI (Annualised) 5.66%

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.

Conclusion

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.

Funding Secure – 12 Month Results

12 month results

The first full year results for lending through Funding Secure are as follows –

Expected ROI (Annualised) 12.00%
Actual ROI (Annualised) 3.08%

The ‘Expected ROI’ figure is taken from the average headline figure across each of the loan parts held over the last 12 months. The ‘Actual ROI’ has come in significantly lower at 3.08%. Now the first thing to say is any platform that offers 12.00 – 16.00% potential returns is inherently high risk as the borrower would paying an interest rate of 20.00 – 30.00%. Part of the reason the return figure is so low is because I’ve chosen to withdraw most of the repayments given a slightly skewed figure based on remaining problematic loans. That said approximately 50.00% of the loans I lent against are gone overdue some of these are in default with little prospect for recovery. Most of the income has been generated by selling the loan parts early at a discount which has also applied downward pressure on returns.

Funding Secure boasts total lending of in excess of £290,000,000 up to the end of these 12 months, with active investors (which it calls members) in excess of of 5000.

Conclusion

So although it looks bad I’m still refining my approach to lending with Funding Secure and I think an improved strategy could deliver  more worthwhile returns. For now Funding Secure will remain active in my portfolio in measured way while I continue to experiment, but i’m under no illusions it will be one the highest risk platforms in my portfolio.

Lendy – 18 Month Results

18 month review

I have got to 18 months lending through the Lendy platform and the results are follows –

Expected ROI (Annualised) 11.50%
Actual ROI (Annualised) 2.39%

In my previous Lendy review ( Lendy Results – 12 Month ) I was quite critical of Lendy and made clear that if things did not improve that they would not continue within in my portfolio. I’m afraid things have not only not improved they have got considerably worse.

The ‘Expected ROI’ is taken from the average headline return of the loan parts I hold. The ‘Actual ROI’ is what was achieved over the previous 12 months and at 2.39% theres is clearly something seriously wrong with this picture. It should be repeated that I only hold a remnant of ‘bad/unsellable’ loans with Lendy so the the returns should naturally be underwhelming, that said all of remaining loan parts are overdue payment some approaching three years. Total recovery on these problem loans has been less than 1.00% of balance over the last six months, which is pitiful.

Lendy and approximately 5000 lenders are now also facing legal action via one particular borrower for substantial damages, this is a live legal action so i can not comment on the merits of the claim, but all I would say is nobody saw this coming or even considered this a possibility. Further to this it would appear Lendy have actively attempted to manipulate review sites by not only removing even slightly negative reviews within minutes of posting but also replacing them with very dubious positive reviews that read as if the poster has little internal knowledge of the platform (ie.possibly paid for reviews), unfortunately this can’t be proved unequivocally without access to internal databases, which of course will never happen, but I think the damage to integrity with the lender base who are aware of this situation, has already been done.

 

Conclusion

It’s looking very bleak for Lendy and it’s difficult to see how it will ever turn things around and rebuild trust with it’s lender base. Lendy unfortunately seem to have viewed it’s lender base with absolute contempt over the last 12 months. I have made the firm decision to no longer invest with Lendy and as a result all referral links with-in this blog have been removed. Even if Lendy miraculously recover the outstanding funds and return to a double digit projected annual return over the next 3 months there is no-way I will return (at least under current management) as their integrity, in my eyes at least has been destroyed. I will still continue to report on Lendy every 6 months while a balance remains outstanding but only in the capacity of a recovery.

Assetz Capital – An Introduction

Introduction

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.

    screen shot 2019-01-05 at 20.01.43

 

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.

screen shot 2019-01-05 at 20.02.08

 

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.

screen shot 2019-01-05 at 20.02.15

 

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.

screen shot 2019-01-05 at 20.02.23

 

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.

screen shot 2019-01-05 at 20.07.03

 

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.