P2P Investment Trusts: Persistence, Smart Timing Or Bad Luck?
Is this persistence, smart timing, or just bad luck? We report regularly here on the travails suffered by some players seeking to open new avenues into peer-to-peer (P2P) investing. After the problems experienced by Funding Circle's investment trust, there's a launch of a similar vehicle by Augmentum, as reported by our friends at P2P Finance news.
AUGMENTUM Fintech has unveiled plans for a new share issue to raise approximately £30m.The fintech-focused investment trust, which has Zopa as its largest holding, is to issue 26,785,714 ordinary shares priced at 112p each and may increase the offering to £50m if demand exceeds its target.It forms part of a 12 month share issuance programme of up to 150m new ordinary and/or C shares.The fundraise is still subject to shareholder approval at a meeting on 1 July and Augmentum Fintech aims to list the shares on 4 July or by 1 August at the latest.Any money committed will be returned if shareholders reject the proposal.Shares will be offered via its brokers Peel Hunt and Fidante Capital as well as through fund investment platforms.The minimum investment will be £1,000.
Loan Latest And IFISA Process Guide
Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). Our latest, property-backed offering yields 8 per cent and has a five-year term.
That figure is the result of over £17 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders' capital is at risk. Read warnings on site before committing capital.
Money&Co. has been lending for over 5 years and has only had one bad debt so far, representing a bad debt rate of 0.04 per cent per annum.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income.Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.So here's our guide to the process:
Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
Step 3: Buy loans in the loan market. Once you've put cash in your account it will sit there - and it won't earn interest until you've bought a piece of a loan. It's this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans - all loans on the Money&Co. site can be held in an IFISA - and your money will start earning tax-free interest.
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We're assuming a 7 per cent return, net of charges and free of tax here.Once you have made your initial commitment, you might then consider diversifying - buying a spread of loans. To do this, you can go into the "loans for sale" market. All loans bought in this market also qualify for IFISA tax benefits.