long term security

for what its worth as a P2P type product and if you do not want to hold a bond fund as this is somewhere between the two or have one already i would say-
i have found the communication good with my emails answered quickly.
My interest payments have all been on time and reinvested(or if the bond has sold an email telling me to invest in another or withdraw income)
The buying of loans on the site was easy but have not used it since the update of the last couple of weeks.As you point out you are buying notes not the bonds which could be an issue for some people
The rates are better on some notes then others & the length of time till maturity and its always worth looking at the info box for details on the security.Due to the basic SM you will probably want to hold till maturity.
Fees can make a dent in the low % manual notes but some are fee free.And this is only a guess but with the smart interest product it could be that there is no fee due to them holding bonds paying slightly more then they are paying back.
They do seem to have picked up some media coverage over the last few months which has always been positive.
         I already had bond funds but dipped my toe in and have been happy so far (but would not tell you what to do ) the idea of fixed income is a good one but do think the risks of the bonds/notes in the wider market may need to be taken on board more.If this was a product offered by someone like HL i think it would be less of a worry then a new platform and more accepted(have seen comments on the MSE & Fixed income investor forums which are negative even when they have not used the service just because they have not heard of WiseAlpha which is a bit unfair)

I detect brains running the show.  Not necessarily the same as secure see
en.wikipedia.org/wiki/Long-Term_Capital_Management
And I could (do) worry about too much cleverness. the funds where they work their way around the mismatch of maturity dates in particular.

Would guess that's why most people mention the newness of the platform and it being notes not bonds as the main risk in the threads over the last year or so.But that would apply to many a P2P platform in the case of insolvency where what has been said would happen,is only a promise till tested & which is why i would also not pick it over a bond fund if investing for the first time in bonds due to the risk you mention

WA will say that a company going bust is not the same as taking a hit on the shares as there would be assets tied up with the banks hence the idea of safety(we hope) but its best to check security on each note.The tax haven idea is not new as my billing to Amazon & Netflix prove.Would agree about the marketing & more so with the smart invest product but is it any different to say the way AC show their accounts on their homepage which looks just like a building society site.Very true about the finance terms being more complicated then people realise (myself included probably)but not sure everybody understands all the docs on property or Sme loan sites but just see the high % rate and invest

What you have described isn't unique to Wisealpha, and I would say is applicable to the wider bond market at large or indeed any stocks and shares you might hold.

You need to form your own opinion if you are comfortable - I do not hold many Wisealpha bonds - I gave Newlook a miss as that looked very flakey even at the time of the offering. You need to do the usual due diligence on a business offering the bonds, I would not and did not touch Saga either.

Hi Guys, 

Interesting to read the comments here, just picked up the tags from some of the folks posting here so thought I'd try to help out where I can. 

Our platform is different from P2P in that the corporate debt asset class (senior secured and unsecured high yield bonds) we operate is an established market where the largest pension fund managers, banks, and funds invest in. P2P is still a young asset class and evolving and in general the borrowers are much smaller and less sophisticated which means there are more risks to consider. Doesn't mean there isn't some good niches but it's more difficult to assess the risk.

In the corporate debt market there is a much higher degree of sophistication in the way the market works from pricing/risk to structuring and the legal mechanisms for security perfection and reporting and the companies have a long track record of financial performance and stability.

Large FTSE 350 equivalent size corporates (especially leaders in their field) also tend to make sure they pay their interest and capital repayments on time (unless they really can't and a restructuring is required) because they have an interest in maintaining a strong reputation in the debt markets and so they can lower their interest costs in the future. Obviously that doesn't mean there is no risk to the capital you invest - even big corporates can suffer from financial performance issues, technological changes that change their entire industry and a whole host of other things that can affect their ability to repay their debt. Investors on our site should read about the company and assess it's financials (by clicking on the company name/image and reading the information provided such as accounts) in the same way that you would on any self-selection investment like buying shares or investing in a property.

Just to pick up on one point mentioned, hard assets on the balance sheet is one feature of security but there is also a pledge over the shares on senior secured debt. The valuation of the overall business is what people look at to assess senior debt LTV rather than a specific asset on balance sheet and the revenue/profit growth and cashflow a company generates (to pay back its borrowings) are also important in assessing credit worthiness. Some companies have larger amounts of hard assets (e.g. property or infrastructure) and others are asset light and therefore the total value, cashflow and financial performance become more important in terms of credit quality.

For those less keen on assessing every company our smart interest product is an alternative (and yes as we say in the overview there are no service fees but there is an early redemption fee mechanism - see the FAQs on the Smart Interest page - www.wisealpha.com/smart-interest).   

It's also true that depending on market conditions the rates on the corporate bonds we focus on can be higher or lower as an average at different times in the market when comparing against the mainstream (top 5) P2P lenders. There are also higher yielding opportunities if people don't want to diversify across everything.

The real question for investors in P2P and WiseAlpha is would you rather have investment exposure to senior secured debt to say something like Virgin media (a £20bn plus valued company with a huge amount of capital invested in a fibre network across the UK) with a number one position in cable television and internet in the UK or a paint manufacturer in the North of Yorkshire or a small property developer? We set up WiseAlpha because our view is clear. According to Credit Suisse the default rate for senior secured was 0.1% in 2016 and just over 1% for all of high yield (secured and unsecured) last year - 2017 will likely be similar but we'll see when the data comes out. 

Every bond issuing company has a different balance sheet - some are hard asset heavy - particularly those in infrastructure types of industry or those with lots of property assets (e.g. the care home, pub 

From my experience (15 years in the debt markets):

- SME's default rates tend to be much higher in a recession and recovery is weak or non-existent. Just look at the performance of the UK banks in the last recession
- Consumer loans show a huge variance in default rates from prime to sub-prime during a recession i.e sub-prime unsecured can suffer black swan type losses and collection process is heavily regulated now 
- Construction and development loans can easily turn to zero or generate very low recoveries if the project can't complete (which is much more likely in a recession)
- Established property lending e.g. residential or commercial at LTVs that are reasonable and proper security procedures are ok and can ride through valuation dips, interest payment delays, property equity risk depends on location, the economy, new housing construction rates but is the first loss in a recession if loan payments aren't kept up.
- The corporate debt markets build increased risk (e.g. from a recession or specific company issues) into the price of a bond security and so more economically sensitive businesses take more price risk on their bonds and the ride from an investor can be a little more bumpy but there is rarely an en-mass default/insolvency rate across the UK's biggest corporates (there are always a few though to keep investors entertained/pulling their hair out!). 

In terms of our structure because the bonds we focus on have to be purchased in large blocks that smaller investors can't purchase we have a structure similar to a fund (assets held in a separate SPV/company from the management company (that has the operating costs of staff, marketing etc) but it's different because instead of investing in the shares of a pooled asset fund we effectively breakdown the size of bonds by issuing our Notes (like a bond but with denominations of a penny) so people get investment exposure to a specific bond with their return and risk dependent on that.   

From a business development standpoint we are continuing to build our UK presence but will also be launching the Euro offering (likely Q1) so more Euro investors can start using the site. There are a lot more European investments than UK investments because it is a much bigger market. We've always said we are willing to grow the business gradually and play the long game. 

I hope that helps guys.