wellesley

Interview: Wellesley Pitches to Raise 1.5M from the Crowd

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UK marketplace Wellesley is currently pitching to raise 1.5M GBP in a convertible from the crowd.

Interview with Graham Wellesley, CEO, Wellesley

What is Wellesley about?

Wellesley is a lending business. It provides an alternative for borrowers than traditional high street lenders. Our business allows us to meet the needs of two key underserved markets:

  • experienced mid-sized property developers who are building homes in the UK
  • investors seeking higher returns that can be achieved in deposit accounts who are willing to take a level of additional risk through a range of different products.

What are the three main advantages for lenders?

  • Lenders can achieve higher risk adjusted returns than are available in traditional deposit accounts
  • Property development lending is asset backed
  • Funding is being put to good use, helping to build homes in the UK

What are the three main advantages for borrowers?

  • They are dealing with a lending firm who specialises in property development
  • We are committed to very high levels of service and quick decisions
  • Each individual borrower is important to us

Wellesley is quite established in the UK marketplace lending sector. Why do your raise capital via Seedrs through a convertible now?

We want to raise more capital to enable us to invest in acquiring new customers and developing our technology. All of our external funding is retail rather than institutional. Raising further equity through a retail route will help us to build a business where strong alignment of interests between investors and shareholders will build a stronger company for the long term.

To which extend (if any) are equity investors covering capital losses on loans to p2p lenders vs the mini bond holders?

  • So far the board has chosen that the company (shareholders / equity investors) will cover the losses incurred by all other investors. This is at the board’s discretion and investors are all aware that they are taking risk in relation to property development lending. Investors continue to carry the risk of losses on both P2P and mini-bonds.
  • Wellesley aims to use the funding to expand its business, its marketing, human resources and IT development.

Wellesley originated about 80M pound YTD. Did you experience any effect of Brexit and what is your outlook for 2017? How do you see the opportunity of the IFISA market?

  • In the run-up to the referendum and in its immediate aftermath property development across “middle Britain” took somewhat of a pause. There are signs now that growth is returning to the market and the outlook for 2017 is positive as the key driver – the demand for more housing – shows no sign of reducing.
  • We continue to develop a product that meets the technical requirements of the IFISA market and will provide an update as soon as there is more to say.
  • We specialise in multi-unit developments, our average unit size is less than £500k. As a result we believe that we are well-placed to face any challenges that the UK residential housing market may face post-Brexit.

Are there any plans for international expansion?

At this stage, quite the opposite. We had started doing some lending in Majorca, Spain and decided back in the first half of 2015 that we would be better able to serve our customers through the economic cycle if we focused on our core expertise and competency in the UK market. Continue reading →

How I Selected My Preferred P2P Lending Marketplaces – Part II

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This is part II of a guest post by British investor ‘Pete’. Read part I first.

The number P2P / P2B platforms in the UK has increased quite quickly over the past few years and I have currently settled on 3 further UK platforms that suit my needs and I strongly believe will be with us long term. In saying this I am not in possession of any privileged information and I am not by inference making any adverse comment about other platforms.

In alphabetical order

Ablrate

One of the new platforms (launched July 2014) that I have chosen to invest in and so far I have had a very positive experience. Specialising in secured Aircraft leasing and Plant and Machinery I have had the chance to diversify into a market that I knew little about before I started on my ‘due diligence’. The market may be new to me but there is a wealth of responsive experience behind Ablrate and coupled with a website update and promised increasing flow of loans I anticipate that my exposure with Ablrate will continue to grow. One interesting ‘innovation’ available on certain loans is ‘Instant Returns’. With long draw down times on some loans the potential for ‘dead money’ is large, instant returns circumvents this issue.

Assetz Capital

I have been investing with Assetz Capital since the second quarter of 2013 and have built up a diversified £ five digit portfolio of secured loans which continues to grow1. As with Ablrate there is a good, responsive and experienced team behind the web site, something that has become more than apparent when dealing with the occasional distressed loans that we must all expect when investing. Assetz Capital have big plans for expansion (they have already grown considerably since I started investing) and a relatively recent change to the way loan parts are bought has removed a very large percentage of the ‘dead money’ scenario that many of us early adopters experienced, not universally liked, I for one view it as a very positive move that has helped to push up my return on investment. I look forward to new opportunities this year.

1 I do not invest by choice in the provision fund protected ‘Green Energy Income Account’ preferring to take on the risk in return for a slightly higher returns.

Wellesley & Co

Again I was one of the early adopters and took advantage of some very attractive introductory rates that were offered. The loan and repayment terms suited my needs perfectly for tax planning purposes. Since then the rates have unsurprisingly been lowered and whilst Wellesley & Co have expanded rapidly and their range of investments on offer has expanded I find myself already invested in those areas with other platforms so I am running full term with my current investments whilst keeping an eye open on what is on offer.

Bondora

I also invest in one non UK platform, Bondora. This would probably be regarded as the ‘odd one out’ in my list of platforms. Far more volatile than the other platforms that I invest in Bondora has expanded rapidly since I started investing in the second quarter of 2013. I have experienced several changes to the platform, some which I have liked and several that I have not. I have experienced new markets being opened up and some eye watering rates of default in these new markets. That said and in spite of the treatment of defaults by the UK tax man and the strengthening of the Pound against the Euro (@16% since I started investing) my return after tax has remained positive. I spend more time on this relatively small percentage of my total investments to keep the returns positive than I do on any of the others. Continue reading →