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.                                           

Moneything – 12 Month Results

12 Month Results

The first year results of investing through the Moneything platform are as follows –

Expected ROI (Annualised) 12.00%
Actual ROI (Annualised) 10.38%

The ‘Expected ROI’ figure is taken from an approximate average across all my loan holdings stated return on the Moneything platform. The ‘Actual ROI’ figure is sufficiently close to expectation in my opinion. In fact Moneything was one of my standout performers in 2018. 18.00% of the loans I’m holding have fallen in to the category ‘Non performing’ in this period, this means they are currently not paying interest and could eventually fall into full default if they continue to not perform. 18.00% is higher than an industry expectation of 10.00% but I have relatively few loans in comparison to the entire loan book.

There has only really been one substantial issue with my experience with the Moneything platform in this period, and that’s deal flow. A single substantial loan was launched on the platform using a innovative offer, it failed to fill, was pulled and relaunched using a different offer. It did eventually fill but both attempts took up several months and Moneything tend to focus on one deal at a time. There were a couple of other loans of a different asset security type but these were relatively small and filled very quickly (hours not days).

Company Information

By the end of this period company stats were £91 million in originated loans. £22.6 million live loan book and 5197 active lenders. There has been a lot talk around Moneything in recent months about the potential introduction of discounted/premium secondary market. It’s an interesting idea that some platforms have already delivered very well while some platforms have attempted it with less successful results. It’s an innovation that generally increases liquidity but depending on how it’s presented it can catch out less experienced lenders who pick up dumped loans that turn out to be much higher risk than they understand. There has been no confirmation to date on this innovation or indeed a proposed introduction date.

Conclusion

I’m happy enough with Moneything to keep in my portfolio for the next period. As stated deal flow has not been great, in fact I actually withdrew idle funds from the platform as I had nowhere to put them without going beyond my comfortable loan limit, they were effectively dead funds/causing cash drag. It’s frustrating because this portfolio is in stage one growth, meaning I want to be depositing not withdrawing. I will look to re-deposit on the announcement of new offerings.

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.        

Referrals Links and Sign Up Bonuses

This page contains all the the referral links and sign bonuses I currently display throughout the Proptechfish blog.

 

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

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. 

 

Referral Link For Funding Circle

This link provides a referral bonus of £100 Amazon gift card when a new customer signs up and invests £2000 for a full calendar month using the link (T&C’s apply). The bonus is split £50 gift card to the new customer and £50 gift card to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

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. 

 

Referral Link for Lending Works

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.

 

The referral link for Lendy has been removed because I am no longer willing to lend on their platform. The other platforms I review that do not have a Referral Link/a Sign Up Bonus is because there is no Link/Bonus readily available for their platform at this the time.

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.

Ablrate Results – 6 Month Results

6 Month Results

The first 6 months results of investing through the Ablrate platform as as follows –

Expected ROI (Annualised) 12.50%
Actual ROI (Annualised) 5.32%

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.

Company news

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.

Conclusion

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.

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.