Assetz Tie-up With The Interface Financial Group (IFG)

There is some ambiguity in that some press articles said a 10% return for investors, and the FT one said 5-7%. Please can you clarify which is correct andrewholgate?

Didn't PFF fall by over 70% in value between end 2007 and early 2009?

I like the idea behind adding a different asset class to the platform, within ISA's it allows you to diversify on one platform within the ISA for that tax year, rather than tie in to a platform that offers just one asset class. The short term nature should fit in nicely within an account that automatically re-invests the returns and 5-7% over 1-3 months is competitive in my view.

I would hope that individual invoices will be available within the manual investment account as well as setting up a seperate bespoke account.

This one (sorry about the size - can't find a way to export a better chart).



And yes, to answer another question on this thread, it did lose about 70% of its value during the financial panic before recovering. And yes, it is a dollar denominated security so for a sterling investor there is fx risk (although the largest holdings are sterling denominated as it happens). And yes there is some modest price volatility. And yes there is probably some interest rate risk (and possibly repayment risk as well - I haven't looked that deeply). So definitely not cash and not an FDIC guarantee in sight. BUT yields 6-7%, has traded in a very narrow range since recovering, can move a seven or eight figure sum in or out without difficulty and with a bid-offer spread of about 1 US cent.

Not for everybody but does it for me. There are other 'safe' places to park excess liquidity with different risk-reward trade offs that may appeal to others but that is not the point. The point is that this sort of alternative exists and any offering from AC geared to short term investing will need to be competitive at some level with the alternatives. Put another way a preferential claim on a basket of the world's largest and most stable companies yields 6-7%, a claim over a pool of SMEs has to be competitive with that - fund or no fund.

In theory of course you are right. Nevertheless I find it hard to bring myself to believe that sterling rates could fall much further. I don't expect a significant hike either, but you never know. My bigger concern at the moment is actually the risk of a downturn in sentiment increasing spreads, especially with an election coming up. I appreciate that's a rather parochial perspective but I don't feel that I understand overseas markets well enough to dabble in fixed interest outside the UK.

Be that as it may, prices of prefs and longer dated bonds are volatile. For this reason I don't see them as a home for shorter-term money, which is where I think the invoice finance product may have a place.

Interesting thoughts but I think focus comments are off the mark.

To set the scene, I am a shareholder and the MD and also a Pratchett fan.  I will also make the point that all the main shareholders are directors in the business and are very experienced lenders, accountants, compliance specialists etc.  This is not a team that just came up with a good idea, but are experienced business people.

If you were party to our original business plan, it was always our intention to offer a full suite of products for SMEs including ID at some point, which would also offer diversity to lenders and a different asset class to invest in.  This business is built on the long term sustainability of it and not on short term gain.  I have no plan to be the biggest in 1 month or 1 year, but when people look back on the industry in 20 years they say AC got it right and are the player that survived.  We are not a private equity play of get scale and then sell out and let others worry about the mess we have created.  This is about being professional lenders and setting standards in this new financial services conduit of P2P.  We have always offered different types of loans and are the only platform to have done everything from trade finance through to commercial mortgages.  Indeed, other platforms are and have diversified and it is a natural part of the business. We have not wavered from that original plan in that we still lender to SMEs and still offer investments to lenders.

In regards to IFG, we have not dived headlong into a market we dont know, but have sourced an experienced player in that market that has systems and processes in place already.

I am also a Chartered Management Accountant and I have an extreme focus on the financial numbers, both on cost of acquisition and on general overheads.  Whilst this is commercially sensitive we are on track to be consistently profitable in 2015.

Nothing has changed in what we do.  We offer finance to SMEs and investment opportunities to lenders.  The investment accounts appeal to some and not to all, in the same way others like to pick and choose which loans they have.  We have broadened the market we can appeal to.  Not everyone likes the way that some platforms only offer one way to invest, yet we are criticised for offering different ways to invest.  That said, the GEIA has had over £500k of investment in the first month.  That's not bad going so some people like it.

I do take constructive feedback from people and readers of the forum will know I listen and we change when things aren't working. 

Andrew, I think your diversification into other formats/markets would have been broadly applauded by most (even if not specifically wanted by all) if the supply of traditional investment opportunities had not all but dried up since the introduction of the new website.