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Platform Lending Sector Price Fluctuates - Plus Loan Latest
Today, we bring you a story of a dramatic revaluation of a platform lender – one with a very different business model from our own, but a member of the sub-sector none the less. What's the moral of the tale? We think it's simply that mainstream finance got its valuations wrong a few years ago, when platform lending was the darling of the financial world. As we said yesterday, the well-managed lenders will survive regulatory crackdowns – and the vagaries of market fashion. AltFi reports:
Zopa has seen its valuation fall by 47 per cent following its latest fundraise to a new money valuation of £188m, according to AltFi.The news comes just one day after the P2P lending pioneer secured £140m from IAG Capital Partners, owing to Augmentum Fintech, an investment trust offering exposure to a portfolio of private companies aiming to disrupt financial services, releasing its half-yearly report showing the down round.The trust wrote down £10.3m in the value of Zopa and its share price has fallen has fallen 4.67 per cent as a result today.Whilst the news was disappointing for Augmentum shareholders, the trust's managers pointed to strong growth in its other holdings in revenue terms.Augmentum said: "Our READ MORELatest from our blogs
Platform Loans - The New Kids On The Personal Investing Block
Call it platform lending, marketplace lending or peer-to-peer (P2P) lending, the loans facilitated in our sector are a new asset class. The novelty of platform lending has contributed to a classic case of the syndrome known as fear of the unknown.There have been some high-profile failures in the sector. The lesson we've learned from from this is the need to vet platforms carefully. Are they conservative in their risk analysis of the companies seeking to borrow? Does the platform take a charge on the borrowers' assets to safeguard lenders' interests? What is each platform's platform's default rate for failed loans? We've written about this extensively.The advent of the Innovative Finance Individual Savings Account (IFISA) which can contain platform lending has been a modest boost for the asset class. Our best intelligence is that that running total of IFISAs is under £5 billion. This is a relatively small proportion of the Individual Savings Account market (see below).Time will prove the quality and value of carefully managed lending platforms and their products. History may have lessons for the market here: Thirty years ago private equity was scarcely acknowledged as an asset class until the actuarial profession began to recognise that well-managed private equity was a good asset class for pension funds. We're confident that history is on our side...
ISA Facts
- 10.8 million adults subscribed for ISAs in 2017/18 against 11.1 million in 2016/17 and 12.7 million in 2015/16. The number of Cash ISAs soldREAD MORE
