Author: wiseclerk

Linked Finance and Eiffel Investment Group Cooperate to Lend to Irish SMEs

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Linked Finance, an Irish p2p lending marketplace for SME loans active since spring 2013 , announced it has secured backing from French investment group, Eiffel Investment Group, who will contribute up to 20% of funding for new loans listed on the platform. Eiffel’s dedicated online lending team has been involved in the space since 2011. It currently manages close to 200 million EUR on behalf of several multi-billion institutional investors across a range of leading P2P platforms, including Lendix in France and Funding Circle in the UK.

The agreement will further boost liquidity on Linked Finance’s platform, which has already provided loans to more than 700 SME since its launch. With plans to further accelerate lending in 2017, Linked Finance’s ultimate goal is to become the country’s biggest source of non-bank SME finance.

Commenting on the news, Niall Dorrian Chief Executive Officer of Linked Finance, said:

“This agreement with Eiffel is a vote of confidence in Linked Finance’s business model and recognises our strong growth trajectory. Eiffel monitors over 100 lending platforms worldwide. They know the industry well and what it takes to succeed.  A diverse funding mix is important for our long-term development. Eiffel’s support will complement our existing lenders, ordinary members of the Irish public, who will still continue to play a crucial role in helping us to fulfil our mission of providing fast and affordable finance for Ireland’s SME sector.”

Etienne Boillot, CEO and co-founder of Eiffel eCapital, said:

“We are experienced investors in online lending platforms and believe they are transforming borrowing opportunities for small businesses around the world, and reducing reliance on traditional bank financing. In Linked Finance, we have identified a leading player in the Irish market and a business that we are confident will deliver on its ambitious expansion plans. As institutional investors, we not only bring more liquidity to the market, but also more confidence in this method of fundraising, which should help attract more SMEs to borrow and more retail investors to lend, a win-win for all involved.”

Eiffel’s online lending activity is backed by several large insurance companies including Aviva France, AG2R La Mondiale. One of their key objectives is to finance loans for small and medium sized enterprises (SMEs) via lending platforms in France and Europe;  they are one of the leading players in Europe in this market.

Linked Finance recently completed Ireland’s biggest ever P2P loan, raising 250,000 EUR in two tranches for serviced office and flexible workspace provider, Iconic Offices. The loan was funded by Eiffel eCapital alongside more than 400 individual lenders; just some of the over 14,000 investors on the marketplace.

In 2016, Linked Finance saw a 132% increase in lending activity over the second half of the year. In total Linked Finance has funded over 700 loans since launch. Key sectors using the SME loans include retail, food, agriculture, manufacturing, professional services, education, construction and distribution

The P2P lending platform is already in talks with other leading institutional investors, in Ireland and internationally, and they are actively looking for further funding partners who want to deploy capital via the site.

linked finance
Peter O’Mahony, Linked finance founder and CEO Niall Dorrian

Workinvoice Completes Securitization

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In January 2017, Factor@Work (an Italy based portfolio manager) has completed the purchase of 5 million EUR of corporate receivables through a securitization vehicle. All the assets have been originated by Workinvoice, an Italian invoice trading platform.

A first for Italy’s securitisation market, the deal was arranged by Workinvoice, while Zenith Service acted as SPV provider and master servicer. The receivables being securitised were sold by Italian small and medium sized enterprises (‘SMEs’) through Workinvoice’s invoice trading platform, and were originated by Workinvoice.

As part of this new securitisation model, Italian SMEs utilize the platform offered by Workinvoice to offer for sale some of their trade receivables held against their clients; the investor may then enter into a credit insurance agreement with an insurance company.

Workinvoice states that based on the receivables that have a low default risk and a high turnover, invoices securitization is a multistep process of providing a financing source by transforming illiquid assets into securities, resulting in the liquidation of the assets and the creation of new financing sources. Continue reading →

Funding Circle Raises 100M US$ from Accel and further VCs

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Funding Circle raised 100 million US$ of equity capital in a round led by Accel Partners. The round also included other existing investors Baillie Gifford, DST Global, Index Ventures, Ribbit Capital, Rocket Internet, Sands Capital Ventures, Temasek and Union Square Ventures.

The company will use the funding to continue to consolidate its position, as well as to continue to invest in technology and talent.

Measured by new origination volume during the last months Funding Circle is the largest p2p lending marketplace in the UK. The company is also present in the US and in continental Europe. Last week the British Business Bank committed to lend 40 million GBP to British SMEs through Funding Circle.

Funding Circle has now raised 373 million US$ in equity capital. The previous round was a 150M US$ in 2015 round led by DST Capital.

Investing in British Properties Through Property Partners

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For decades buying houses, refurbishing them and selling them at a higher price and moving on to the next property seemed like a popular sport to Brits. Many of them see properties as investments and with house prices mostly moving up lots of them aimed to finance a property while they were young and then build a portfolio. With limited supply of new land with planning permissions this strategy worked well most of the times in the past, except when the market overheated and a real estate bubble popped.

There are downsides to this do-it-yourself approach:

  1. Concentration of risk in one or few properties: if they underperperformed for what ever reason, the yield was sub-average
  2. A lot of money, time and work required. The investor had to do everything itself as a landlord
  3. Selection of new properties usually limited to a small region the investor lives in

British platform Property Partner allows everyone to invest in British properties from a minimum of 50 GBP. Investors select a listing, invest into a SPV (special purpose vehicle company) that pools the investment in the property. The SPV collects rental income and pays dividends to investors monthly. A useful table of the past achieved rental income can be seen here. In the green marked cases the actual rents are higher than the original forecsts. Potentially investors can also gain, if the value of the property rises.

The time span of an investment is 5 years, however investors can try to sell their parts on the secondary market, which allows discounts and premiums any time.

The platform allows the investor to diversify across multiple properties easily. The fee is 2% for investment (in new listings or buying through the secondary market). For management, advertising and letting Property Partner charges 12.6% of gross rent.

So far Property Partner has funded 311 properties for 43.9 million GBP with 9.100 investors participating.

property partner listingFor new listing there is a pre-order period, where bids are collected. If the listing is oversubscribed then each investor is allocated a lower proportionate amount of shares.

Each listing contains an investment case desctiption, property details, a floor plan, financials, a solicitor’s report and a surveyor’s report as well as the house price index (HPI) information for the area.

For the secondary market there is a ‘data view’ section which lists key indicators for the parts listed for sale.

Investors that do not want to pick listings can set up the auto-invest option which will automatically invest an amount the investor sets each month in 5 properties.

Investing from abroad

Property Partner allows foreigners (except for US residents) and corporations to invest. If you do not live in the UK but see the UK housing market as an investment opportunity Property Partner is a hassle free possibility to invest in british real estate. Non resident investors should consider using Transferwise or Currencyfair to avoid high bank fees and get a better currency exchange rate.

How to get 50 GBP cashback at sign-up

To get 50 GBP referral cashback, when you invest more than 1000 GBP sign up now via this link . To see available promotions by other platforms visit our cashback offer page.

property partner cashback

Property Partner cashback confirmation at sign-up. To see it follow this link and sign up.

 

 

International P2P Lending Volumes December 2016

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The following table lists the loan originations of p2p lending marketplaces in December. Funding Circle leads ahead of Ratesetter and Zopa. Lendix reports an all time record month. Saving Stream and Assetz Capital had a good month, too. Mintos crossed the milestone of 100 million EUR originated since inception. The total volume for the reported marketplaces adds up to 414 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms.

Investors living in national markets with no or limited selection of local p2p lending services can check this list of marketplaces open to international investors. Investors can also explore how to make use of current p2p lending cashback offers available.

P2P Lending Volume 12/2016
Table: P2P Lending Volumes in December 2016. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading →

I Started a Zlty Melon Test Portfolio

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A few weeks ago I decided to start a small test portfolio investing in p2p loans at Zlty Melon. Zlty Melon is a p2p lending marketplace in Bratislava, Slovakia (see earlier articles about the Slovakian market). The marketplace lists loans to borrowers in Slovakia in Euro currency and to Czech borrowers in CZK. On the investor side Zlty Melon is open to residents of the European Economic Area. The website is available in English, Czech and Slovak languages.

I deposited 400 Euro via SEPA transfer. If you need currency conversion during a deposit, it might be cheaper to use Transferwise or Currencyfair than to do a direct bank transfer. Zlty Melon offers a range of loan types from unsecured consumer loans to ‘cashfree housing loans’ which the site describes as follows: ‘Loan to finance a new housing purchase. This loan is provided in cooperation with a well-known developer and is used to cover part of the purchase price of the property bought by the applicant. The real estate is being under construction.’.

I set up an autoinvest (called ‘Investment Manager’) to automatically bid 25 Euro on each new cashfree housing loans, as these seem the most secure loans and so far according to Zlty Melon’s statistics for this loan type there have not been any defaults. I set it up to invest in Slovak loans only as I didn’t want any currency risk. Maturity periods range from 1 to 5 years. For this loan type the interest rate is 5.9% p.a. and Zlty melon charges investors a fee of 0.33% on all installment payments. EDIT: Currently Zlty Melon runs a promotion for investors – if a large amount is invested in a single cashfree loan then investors can earn up to 1.1% bonus interest, making the total interest rate up to 7.0%. For unsecured consumer loans (which are graded AA to D- & HR) interest rates are much higher – up to 30-40% for HR loans – and the fee is 1%. Investors there engage in auction bidding against each other.


Screenshot: Excerpt of my Zltymelon dashboard

As I started only a few weeks ago, I don’t have that much experiences to share, only that the website is easy to use and offers a lot of information. With my selection criteria there is quite a bit of cash drag, as there are not that many new loans that match my filters. The total new loan volume (all loan types) that Zlty Melon originates each month is about 0.2 million EUR. Zlty Melon has a good comprehensive statistic page.

Zlty Melon does have a secondary market, but I have not used it.

While the interest rates on the loans I invest in are rather low, I like that the possibility to invest into Euro based p2p loans in a marketplace outside the Baltic area for diversification. I will see how my test portfolio develops and report on it periodically. Continue reading →