We revert to a familiar theme: mainstream investment into the alternative finance sector. Our friends at AltFi reports on a rose amongst thorns.
Listed fintech VC fund Augmentum Fintech is joining two key FTSE Russell indices on 19 June as it is now counted among the 620 largest-listed companies on the London Stock Exchange.
Augmentum will be added to the constituents of the FTSE SmallCap Index, which counts the 351st to the 619th largest-listed LSE companies, and by extension it’ll be added to the FTSE AllShare Index.
“Since our IPO just over two years ago we have built a balanced portfolio of diversified and Our friendssdifferentiated fintech companies,” said CEO Tim Levene.
“Our ambition remains to grow the fund to enable us to continue investing across our portfolio companies, and to seek out other exceptional fintech opportunities in both the UK and the wider European market”.
In recent months Augmentum’s share price has quickly recovered to its pre-coronavirus levels, giving the fund a market capitalisation of around £121m.
Historical Performance And IFISA Process Guide
That figure is the result of over £21 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.
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:
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.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.