Assetz Exchange: The Future of Buy-to-Let

The 1% cashback will be reconfirmed on the dashboard shortly once the original list is reconciled onto the system - there is the ability to register as a non founder member but you would have to find your way there on your own as we haven’t announced this yet

hi Stuart. I had an email about this some time back, then heard nothing...I don't know whether than means I'm a founder member or not. Can you say?

There have been some questions over the launch time from pre-announcement for Founder Member registrations to start and the soft launch a few days ago. Quite simply there was much to do in terms of completion of the systems, client money compliance auditing before go-live and sourcing of the first few properties. The soft launch is to gradually fill the first property investment funding and ensure investor questions and feedback are addressed and then we do the full launch. Direct investors in the Seedrs campaign are now coming in privately (PM me if interested) and then the Seedrs campaign goes live publicly as we haven't pressed that button yet, awaiting go-live. 

Absolutely correct here carolus. I suspect the issue is that because AE only have the p2p lending permission (more specifically permission to operate an electronic system in relation to lending) they are setting a cap so that the majority of any returns relating to the investment will relate to lending and not capital gains. Unlike some of the others who operate in this space (e.g. British Pearl) AE will not have small scope AIFM permissions. stuartassetzcapital will I hope correct me if I am wrong on the above but would be surprised if this wasn't the case. I have also focused on the p2p lending rather than property investment platforms up to this point so would be grateful if anybody on here could comment on how other players in this property investment space have structured themselves. 

For me it is a material issue and having just made my first deposit (still not arrived 3 days later incidentally) I may simply withdraw without deploying. The point about AE not having this permission has already been raised on this thread and it was claimed it wouldn't be a problem. However, in my view it renders the platform at a significant disadvantage which neither as 1) a shareholder and investor in AC; or 2) a prospective investor am I happy about. 

It isn't that I expect there to be that level of y.o.y. property growth (at least in relation to the one investment currently offered on AE) but as carolus pointed out under your current model the upside is capped and the downside is not which rather defeats the point of an SPV equity investment structure. The bottom line is you should have the necessary permissions to carry out your business plan. I appreciate AIFMD is more onerous  but quite frankly particularly as a small scope manager it should be manageable. There are also 3rd party tie up structures that could have been considered, or indeed MiFID permissions with additional costs, if you wanted to make sure you could target beyond the HNW/SI investor base.

I would appreciate you:

1) Confirming this analysis is correct; and
2) Whether AE is considering applying for further permissions so it can offer property investment on the same basis as its competitors.

Thanks 

I think it's always difficult to get the first one away when setting up a new platform with systems and process kinks to iron out.  I would hope/expect a bit more volume in the next few weeks so it can kick on.

I had a phone call with Peter a few weeks after the launch expressing my disappointment at the state the site was launched in. Many of the issues are covered in this thread plus others. I was assured the issues were being worked on and sure enough with in a few days most of the formatting and information issues were addressed. I made clear my only other major sticking point was the £10 minimum investment claim, which no matter how you cut it was false. Again I was assured it was going to be addressed and sure enough the next marketing email I received the claim had been removed. I increased my investment as a result. 

So far in my experience they have been responsive which is a positive. There were at least 3 big jumps in funding too (over 10%) which one might deduce as being big hitters or underwriters. In the phone call I also told Peter I would be willing to write an introduction blog providing the issues were addressed, and they have been so I am due to write something this month. Although I would prefer for this first opportunity to complete first.

I've not lost faith in AE, as i think it's far too soon. But i will sit on my hands and wallet until I start to see my funds making returns.                    

It's not surprising you're confused. Here's a quote from their loan conditions:

"7.7 Upon the end of the Loan Period, the Broker will charge the Lender a fee at one per cent (2%) of the Sale Proceeds less any fee prescribed in Article 7 herein (the "Repayment Fee")"

I told them about this, and other inconsistencies, by email, telephone and via this thread months ago. 

Also, there's still no clarification on which particular rule restricts the capital growth to 5%, or whether this is applied annually or averaged over the life of the loan. E.g. If a 5 year loan gained 40% in year 1, lost 10% in year 2 and remained level in the other 3 years, would the investor gain be:

A) A 25% gain (overall gain of 30% restricted to 5 x 5%)

Or

B) A 5% loss (first year gain limited to 5% plus 10% loss in second year).

Again, my request for an explanation with worked examples was ignored.