News Briefing - Crowdfunding, SME And Alternative Finance

collaboration in practice as teachers and pupils unload school furniture from a boat

1.UK – AltFi

The BBC’s take on LCF.

Amanda Cunningham lost £22,000 investing in London Capital and Finance

 

And Jim Armitage at the Evening Standard has a story with some new facts.

 

VICTIMS of the collapse of London Capital & Finance today met administrators for an update on how much of the £237 million they invested looks likely to be recovered.

The meeting with Smith & Williamson will also see the bondholders, who number more than 11,700, appoint a five-strong representative committee to vote on certain aspects of the administrators’ actions, such as the fees it charges them. Bondholder Mahendra Bajaj said: “We want to know more about what progress has been made so far. Some of us think we should have appointed a bigger firm with better infrastructure but I don’t think there’s any point replacing S&W at this stage.”

 

 

2. UK – P2P

 

The FT reports concerns over Funding Circle. 

“Recently listed small business lender Funding Circle has cut expected returns for its UK retail investors after raising its estimate of defaults. A higher risk of default on UK and US loans made in 2017 and 2018 has prompted the lender, which matches individual and institutional investors with small business borrowers, to revise down its predicted returns and tighten its lending criteria. Peer-to-peer lenders have attracted investors who are looking for better returns than high street banks can offer. But they risk losing their capital if the loans go bad. Funding Circle and other such lenders seek to limit that risk by creating portfolios of loans spread across different businesses and allowing customers to choose between a higher and lower risk option. For Funding Circle’s higher risk option, returns for UK retail investors are now expected to be between 4.5 and 6.5 per cent, down from the 5.5 to 6.5 per cent predicted in February. Those who lent through the lower risk option can now anticipate returns of 4.3-4.7 per cent, rather than 4.9 to 5.2 per cent. John Cronin, an analyst at stockbroker Goodbody, said he continued to have concerns about Funding Circle’s loans, particularly if there was a downturn. “We suspect many customers are not sufficiently compensated relative to the risks they are taking, despite the juicy returns on offer — with some of the retail investor base particularly at risk in this respect,” he said. The peer-to-peer industry has faced rising default rates. In January last year Zopa, which lends to individuals, warned of higher defaults and said it expected lower investor returns. Funding Circle’s latest revision to its predicted default rates, which was published last week, was its second this year. While the company said the market for small businesses loans remains strong, it expects more “volatility” in some of its higher risk loans. Funding Circle was one of the highest-profile IPOs of 2018, when its shares were valued at £1.5bn. Since then it has failed to match its 440p debut price. The share price sunk as low as 230p in December before recovering over the first three months of 2019. But the expiry of a 180-day lock-up, which restricted some IPO investors from selling, has dragged the shares down again since the start of April, and on Wednesday they fell a further 8 per cent to 280p. Funding Circle’s sister investment trust, Funding Circle SME Income, announced this month it was winding down after disappointing returns.”

 

P2P Finance News’s take is here.

3. UK – P2P

 

P2P Finance News reports.

 

“P2P Global Investments (P2PGI) has warned that its legacy peer-to-peer lending portfolio continues to be more volatile than expected despite posting an improved net asset value (NAV) return for 2018.

P2PGI – the world’s first P2P-focused investment trust – revealed in its annual report that its NAV for 2018 was 5.2 per cent, up from three per cent in 2017.

The investment trust shifted its strategy from P2P to more specialist and asset-backed lending in 2017 but has warned that returns on its legacy portfolio, particularly consumer loans, have been lower than expected as it continues to run it down.

“Although the legacy portfolio continues to run off and has reduced from 48 per cent in December 2017 to 16 per cent at 31 December 2018, the returns on the portfolio have been lower than expected,” P2PGI said.

“This is driven predominately by the UK consumer portfolio where the overall net yield is significantly below target and has displayed monthly volatility throughout the year.”

 

4. US - Equity

 

Crowdfund Insider reports.

 

“SeedInvest, an online capital formation platform that claims over 250,000 registered investors (50,000 accredited), is planning a significant expansion.

SeedInvest is a full stack crowdfunding platform leveraging all three securities exemptions to raise capital online from seed stage an up.

In the fall of 2018, SeedInvest announced its acquisition by Circle – a digital asset ecosystem that has raised about $250 million from big-name investors. The marriage of the two companies combines Circle’s regulated digital asset marketplace with a primary issuance platform that is also a broker-dealer. The deal received FINRA approval this past March.”

5. International – FinTech

 

Coin Telegraph 

South Korean electronics giant Samsung may end up developing a public-private blockchaincomplete with its own cryptocurrency token, an anonymous source told crypto industry news outlet CoinDesk Korea on April 24.

The project, part of an undertaking by the company’s dedicated blockchain division, would see a blockchain mainnet appear based on Ethereum (ETH), along with a new asset dubbed Samsung Coin.

“We expect Samsung Coin to come out in the market, but the direction has not yet been decided,” the source, who is in touch with the plans, told the publication.

The news, while not confirmed officially, comes as Samsung continues its various forays into both the blockchain and cryptocurrency spheres.”