It’s deal time in the Fintech sector, with IPOs and funding rounds coming to the market, as previously reported here, in profusion. Our friends at Altfi offer reports of two major recent deals.
Lending platform CrowdProperty has bagged a £300m five-year institutional funding line with a new unnamed UK asset manager.
The latest investment is designed to complement CrowdProperty’s existing capital sources.
To date, the lender has funded the development of over 1,500 homes worth £297m across the UK, originated £181m of agreed facilities and lent £141m.
“Investor liquidity is higher than ever due to the deep property expertise, high-quality origination, 100 per cent capital and interest payback track record and trusted brand built since 2014,” Michael Bristow, UK CEO and founder, said.
“This is naturally attracting more institutional sources of capital looking to work with the most proven, highest quality players with deepest asset class expertise and market-leading track records.”
Bristow also believes that despite the £300m injection, CrowdProperty is still yet to realise its full potential in the UK market.
The listing, which is set to value the company at £255.6m, will see LendInvest raise £40m from its new share offering due to take place on 14 July.
“From a standing start we now have £2.8bn FuM [funds under management], and count some of the world’s largest financial institutions as investors,” said LendInvest’s founder and executive chair Christian Faes.
“We have achieved this by building a platform that offers speed and certainty to borrowers and intermediaries while offering investors access to an attractive asset class with compelling risk-adjusted returns.”
“We are thrilled to welcome our new shareholders to the business and look forward to beginning the next stage of our journey.”
“This IPO will provide us with the resources and flexibility to continue investing in our technology, expand our range of products and enter new segments of the market,” added Lockhart.
LendInvest had planned to IPO in 2019, however after several ‘pre-IPO’ funding rounds, the plan was shelved after Funding Circle’s disastrous market debut and the torrid market conditions which left the company nursing a £2.2m hit to its profits.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 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 2020/21 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.