shimself
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Post by shimself on Oct 8, 2015 8:59:43 GMT
Update Report for October 2015
07 October 2015
Dear Investors
We are writing to provide an update on business progress at Assetz Capital since the previous update in June.
- Lending and Funding Lines:
Since June we have now commenced lending with Victory Park Capital following conclusion of their fund raise and their contracts being fully signed. They are providing us an initial £150m funding line for loans. We are also in final legal negotiations with another institution for a similar amount that is expected to go live in October and have also signed a commitment letter with a third institution for a further £200 million for real estate lending that is expected to go live in January. This will take our funding lines to circa £500 million however we have retained substantial proportions of our loan origination for retail investors and we are finalising our new Innovative Finance ISA offering ready for next April.
We also estimate we have approximately £200 million of capacity in our current retail investor base and we went through the 10,000 registered private investors level last week. Retail investment will remain a major focus for the business and we see the ISA opportunity as very significant in its ability for us to deliver very safe investment products for a modest coupon whilst delivering very competitive borrower interest rates that go right up against the challenger banks but with other USPs.
- Business Progress:
We recently launched two more investment accounts on the platform in addition to the original Green Energy Income Account paying 7% per annum. This started with the Great British Business Account that also pays 7% per annum and was followed by our Quick Access Account that provides a return on cash deployed on the platform that is not yet invested, thus removing one of the negatives for peer-to-peer lending where for most platforms cash that is not invested (such as loans repaid by borrowers prior to being reinvested) cannot earn a return. This Quick Access Account pays 3.75% per annum and is currently capped at £1 million and soon to be expanded to £2 million due to demand. This original £1 million was invested in just a few hours which was great to see from a lender demand point of view given the modest coupon. Although this account looks like an instant access deposit account it is backed by peer-to-peer loans producing income and therefore not a deposit taking structure for which we would need a banking licence. It is a good example of how peer-to-peer lending is beginning to encroach on traditional banking products but from an investment perspective where the added risk helps produce the enhanced returns. Nonetheless all of these accounts have a provision fund of 5% to cover the risk of capital loss or missed interest and this is a level that is not matched elsewhere in the industry.
Our website also underwent a substantial upgrade recently, making it more user-friendly for both lenders and borrowers.
- Awards and Recognition:
1) Credit Today Awards - Finalist: "Alternative finance platform of the year".
2) FinTech Excellence Awards - Winner: "Excellence in peer-to-peer lending".
In the press there have been may references to us and the latest, in City AM (http://www.cityam.com/225438/debt-emporium), referred to us this week as : "... sector giant Assetz Capital launched an SME income account, targeting a 7 per cent gross per annum capped return"
- Team:
We have taken on several new staff including National relationship managers to deal with borrowers and brokers, customer service team members to maintain our high levels of service to lenders, another recoveries specialist to help maintain our very low loss rate is a platform by recovering any defaulted loans through the security we take every time and also grow our marketing team as we continue our drive into the large broker market in the UK. Our Invoice Discounting JV with IFG has hired a CEO, John Mellor (https://www.linkedin.com/pub/john-mellor/23/b35...) and strong progress is now being made in that division and we expect to bring those funding products to the Retail investor audience shortly.
We hope to have other news to announce shortly and this is likely before the next quarterly update.
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Post by Butch Cassidy on Oct 8, 2015 9:12:06 GMT
As a soon to be shareholder I see this progress as positive & am confident about my future (equity) investment. However as a lender I fear I will need to look elsewhere for my opportunities, as less available loans at worse rates & being pushed out by institutional cash will mean much lower returns which is a shame; but on balance I want AC to prosper (even without my personal lending) & hope that the future delivery meets with the bold promises.  |
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bigfoot12
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Post by bigfoot12 on Oct 8, 2015 9:39:43 GMT
As a soon to be shareholder I see this progress as positive & am confident about my future (equity) investment. However as a lender I fear I will need to look elsewhere for my opportunities, as less available loans at worse rates & being pushed out by institutional cash will mean much lower returns which is a shame; but on balance I want AC to prosper (even without my personal lending) & hope that the future delivery meets with the bold promises. I think that the two are much more closely related than you seem to. If AC have a loan flow of about £2m per month what use is £500m institutional money - perhaps they will increase the cap on the QAA by another £400m? VPC and the like have some advantages in scale, leverage, and tax efficient structure, but they need a decent amount of loans at a good rate to allow their post fee returns to be attractive.
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Post by Butch Cassidy on Oct 8, 2015 9:59:19 GMT
Simply having £500m to invest will open plenty of doors with introducers/brokers etc. & that will lead to a substantially increased deal flow; I do not doubt that AC will endeavour to "retain substantial proportions of our loan origination for retail investors" it is simply a question of at what rates & how it will be split up - from a private lenders view I fear it will be nearer the 7% "packaged rate" than the previous 12-5% direct rate.
From all the platforms that are "going for growth" & "moving to the next level" it is invariably the early adopter investors who lose out but that is the price of growth, from which I hope to benefit as a shareholder.
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Post by chielamangus on Oct 8, 2015 12:38:54 GMT
Yup, the marginalisation of the retail investor is proceeding apace. It's what I have always expected. In five years time i wonder whether AC will have any crowd funding at all, notwithstanding the statements that crowd funding is very important to them. All Chris's efforts with the website may well come to nought.
Some here (and AC) have argued that interest rates will rise with "normalisation" of the economy. I was in the minority of one arguing the opposite. Part of the normalisation process is big money moving in on investment opportunities. The crowd will be crowded out. The question for me is whether with all the experience gained more P2P start ups might be able to generate a niche market for the (smaller) crowd. But even if they can, I still only see interest rates heading down.
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mikes1531
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Post by mikes1531 on Oct 8, 2015 12:45:55 GMT
Firstly, as an investor via the Seedrs offering, I would have expected to have received this update directly. I didn't.  Can someone please let me know how it arrived? Was it a direct email from AC? From Seedrs? Or....? Secondly, while I hope the grand plan works out, I'm still quite disappointed with the deal flow. And I can't imagine that the institutions who have pledged hundreds of millions of £££ to AC for onward lending are going to be happy to wait months -- or will it be years? -- to deploy the funds they have committed to AC. It's great that AC have lined up numerous sources of funds -- including the ISAs that could go live in less than six months -- but if AC can't improve their deal flow then it will all end up in tears. AC have managed to draw down less than £100k of new loans so far in October. I realise that there's another £4M 'expected' to draw down before the end of the month, but note that more than half of that is expected on the last two working days of the month, and there's been an awful lot of slippage in drawdown dates recently. There's also an expectation of repayments of existing loans in the near term, such that if the the lenders of the cash released from those wish to re-invest much of that then there will be little left of the loan 'pipeline' to offer to lenders trying to increase their investments. I sincerely hope that AC do manage to increase their deal flow significantly very soon. But they've been promising to do that for an awful long time now and there's a limit to how long investors are willing to wait for jam tomorrow. We need to see some solid results before we can start to believe that things really are different this time. |
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bigfoot12
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Post by bigfoot12 on Oct 8, 2015 12:49:50 GMT
Yup, the marginalisation of the retail investor is proceeding apace. It's what I have always expected. In five years time i wonder whether AC will have any crowd funding at all, notwithstanding the statements that crowd funding is very important to them. All Chris's efforts with the website may well come to nought. Some here (and AC) have argued that interest rates will rise with "normalisation" of the economy. I was in the minority of one arguing the opposite. Part of the normalisation process is big money moving in on investment opportunities. The crowd will be crowded out. The question for me is whether with all the experience gained more P2P start ups might be able to generate a niche market for the (smaller) crowd. But even if they can, I still only see interest rates heading down. I share all those concerns, but there are at least to reasons not to be pessimistic about the retail share of the market, although the first of those does imply falling rates. 1) My guess is that the P2P ISA will lower rates for the more successful platforms, and once the initial overhead of setting up the ISA has been covered ISA money might be a lot cheaper than institutional money. Most ISA investors will not be comparing the product with a "GBP hedged USD high yield fund" but with cash ISA rates, which might lead to different problems down the line. 2) Sometime next year the banks are going to have to refer rejected SME borrowers to some sort of alternative finance platform or broker. This could be significant when you consider the proportion of the market share of P2B at the moment. Could easily take another 12 -24 months before it gets going properly.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 8, 2015 13:01:25 GMT
Firstly, as an investor via the Seedrs offering, I would have expected to have received this update directly. I didn't. Can someone please let me know how it arrived? Was it a direct email from AC? From Seedrs? Or....? Posted yesterday on the Seedrs site. No direct mail or mail from Seedrs though no doublt it would appear on the weekly Investor update. Seems in part to have been prompted by a pointed comment on the Seedrs site from an investor about comms delays. Stuart has also indicated something coming on 'trigger' investment shortly. Edit: Nothing on Ac site, though I have discovered that apparently we are sponsoring this bloke  Will Addison
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mikes1531
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Post by mikes1531 on Oct 8, 2015 13:30:22 GMT
Firstly, as an investor via the Seedrs offering, I would have expected to have received this update directly. I didn't. Can someone please let me know how it arrived? Was it a direct email from AC? From Seedrs? Or....? Posted yesterday on the Seedrs site. No direct mail or mail from Seedrs though no doublt it would appear on the weekly Investor update. Seems in part to have been prompted by a pointed comment on the Seedrs site from an investor about comms delays. Stuart has also indicated something coming on 'trigger' investment shortly. Thanks. As someone who hadn't used the Seedrs site before the AC offering, and may not use it again, I'd have to say this is a pretty poor way of communicating with AC's investors. We'll see what happens with the Seedrs weekly update, but ISTM that in the past they've generally been attempts to interest people in further investing opportunities so I've tended to ignore them. Maybe it's just me.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 8, 2015 13:35:49 GMT
Posted yesterday on the Seedrs site. No direct mail or mail from Seedrs though no doublt it would appear on the weekly Investor update. Seems in part to have been prompted by a pointed comment on the Seedrs site from an investor about comms delays. Stuart has also indicated something coming on 'trigger' investment shortly. Thanks. As someone who hadn't used the Seedrs site before the AC offering, and may not use it again, I'd have to say this is a pretty poor way of communicating with AC's investors. We'll see what happens with the Seedrs weekly update, but ISTM that in the past they've generally been attempts to interest people in further investing opportunities so I've tended to ignore them. Maybe it's just me. You should get an Investors update which tells you that there have been updates or comments on the Investments you are involved in. This is different to the Seedrs Weekly Roundups updates which are just investment opportunities and can be ignored.
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bigfoot12
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Post by bigfoot12 on Oct 8, 2015 13:41:44 GMT
Thanks. As someone who hadn't used the Seedrs site before the AC offering, and may not use it again, I'd have to say this is a pretty poor way of communicating with AC's investors. We'll see what happens with the Seedrs weekly update, but ISTM that in the past they've generally been attempts to interest people in further investing opportunities so I've tended to ignore them. Maybe it's just me. You should get an Investors update which tells you that there have been updates or comments on the Investments you are involved in. This is different to the Seedrs Weekly Roundups updates which are just investment opportunities and can be ignored. , you can change this in your Seedrs account profile. You can get information on your investments straight away, or weekly (I think some people put £10 into everything). You can also turn off the weekly roundup without stopping your investment news. This is one of the few things about seedrs I like.
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mikes1531
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Post by mikes1531 on Oct 8, 2015 13:57:25 GMT
You should get an Investors update which tells you that there have been updates or comments on the Investments you are involved in. This is different to the Seedrs Weekly Roundups updates which are just investment opportunities and can be ignored. , you can change this in your Seedrs account profile. You can get information on your investments straight away, or weekly (I think some people put £10 into everything). You can also turn off the weekly roundup without stopping your investment news. This is one of the few things about seedrs I like. Thanks for the hints. I've unticked the requests for periodic emails. I've set "How often do you want to receive automatic updates on campaigns you're interested in?" to Immediately and we'll see how much traffic that generates. Perhaps it's just my misinterpretation, but as far as I was concerned the AC 'campaign' ended when they raised the funds they wanted and further investment was not an option. I now guess that, with Seedrs, campaigns go on and on. I sure hope they're not into politics!
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Post by Jack Barlow on Oct 8, 2015 14:28:21 GMT
Firstly, as an investor via the Seedrs offering, I would have expected to have received this update directly. I didn't. Can someone please let me know how it arrived? Was it a direct email from AC? From Seedrs? Or....? Posted yesterday on the Seedrs site. , I'm probably being thick but please could you post a link to where the AC update is on the Seedrs website. I can't see anything having changed on the AC campaign page since April.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 8, 2015 14:46:25 GMT
Posted yesterday on the Seedrs site. , I'm probably being thick but please could you post a link to where the AC update is on the Seedrs website. I can't see anything having changed on the AC campaign page since April. Log in - portfolio - (drop down list from avatar top right) - click on AC investment anywhere - updates is first tab, discussion fourth tab www.seedrs.com/post_investment/16105#9008 (not sure if this is me specific)
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Post by Jack Barlow on Oct 8, 2015 15:23:42 GMT
ilmoro, I'm probably being thick but please could you post a link to where the AC update is on the Seedrs website. I can't see anything having changed on the AC campaign page since April. Log in - portfolio - (drop down list from avatar top right) - click on AC investment anywhere - updates is first tab, discussion fourth tab www.seedrs.com/post_investment/16105#9008 (not sure if this is me specific) Thanks, that's where I was looking but I don't see any tabs! I do for my other Seedrs investments. I'll contact Seedrs.
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Can someone please let me know how it arrived? Was it a direct email from AC? From Seedrs? Or....?
