News Briefing - Crowdfunding, SME And Alternative Finance

Construction workers eat lunch 200 feet up in the air.

1.UK – P2P

P2P Finance News reports:

“Blend Network has boosted its lending team with two new appointments.

The peer-to-peer property lending platform has named Daniel Netzer as lending manager and Morgan Sparrow as lending associate.

This follows the appointment of Paul Watson as head of origination in January.

Netzer brings a 10-year track record of working for various firms across residential and commercial property sales and asset management, including experience in distressed assets, fund management of residential income portfolios, new acquisitions, and development management.

The platform said he also brings experience of the property market outside of London, where Blend Network is focusing its activities.

2. UK – P2P

 

The sector is looking to expand its share of SME funding, according to PWC research.

 

“PEER-TO-PEER and other alternative lenders could ‘disrupt’ more than a third of business lending by 2030, new research claims.

A new report from accountancy giant PwC, called ‘harnessing the power of disruption’, identifies key financial services areas open to – and already being impacted by – advances in technology, changes in demographics and customer behaviour.

In the UK small- and medium-sized enterprises (SME) sector, the report found that new digital entrants such as P2P lenders could dominate the market for underserved business borrowers, representing £4.1bn or 37 per cent of lending.

It warned that new entrants could face the pressure of regulatory scrutiny or a full economic cycle but said that this does not mean established brands can rest on their laurels.

The report suggested that financial services firms should keep a close eye on changes in appetite among their customers, highlighting the emergence of P2P lending as a “preferable option” for those not able to access lending through mainstream sources.”

 

3. UK – AltFi

 

The Evening Standard offers a report of where the LCF monies may have gone.

 

“When the pensioners and other savers who bought £237 million of bonds from London Capital & Finance made their decision to invest, they were told their money would be put to work lending to large numbers of small and medium-sized companies. 

Few can have guessed significant sums would be used on loans to buy horses for the artistocratic sport of eventing.

But that is what happened. A total of £12 million went in loans to stables in the moneyed Sussex countryside. Sadly for investors, now LCF has collapsed, administrators say they are unlikely to salvage much of the cash.

Many of the horses appear to have been sold off in the past six months or so, with some uncertainty as to where the proceeds have gone.

Among the buyers is the daughter of biotech billionaire Dr Geoffrey Guy, the founder of medical cannabis giant GW Pharmaceuticals.

Lately, he has attracted lurid headlines over a dispute with a tenant on his estate.

But before that, Guy’s daughter Ellie bought four horses for nearly £400,000 for her eventing career from stables connected with LCF, three of them this March, according to eventing databases. She is having a fifth vetted with a view to buying that, too. 

A further three were bought by Hayley Mather and Mark Hogan’s stables in Cheshire last year. Hogan used to work for the LCF-funded stables but said he no longer did. The pair are not accused of any impropriety, and neither are the Guys, but their purchases are indicative of a flurry of equine sales.

The Evening Standard has traced at least five other connected eventing horses on sale since last autumn through specialist sales agents. 

Administrator Smith & Williamson said it had serious concerns about the equine operation.

In a recent report, it said LCF lent £10.4 million in 2015 to the disqualified director and multi-millionaire Spencer Golding, a sole trader using the business name of Home Farm Equestrian.

Administrators believe the loan was transferred to a firm called River Lodge Equestrian Centre in 2017. That would be fine if all the horses used as collateral moved too. Administrators are attempting to ascertain if that happened.

Sources close to Guy said she paid River Lodge for three horses and Home Farm for one. 

Valuations in the unregulated equine world are rarely transparent, but even by the industry’s standards, the stock lists River Lodge provided to LCF appear to have dramatically overstated the true value of the horses being used to secure the loan. 

River Lodge was run and owned by an Irishman called Rafael Sanctuary, whose partner is the champion rider Michelle Kenny. Asked about the mysteries surrounding the horses, Kenny said: “We ceased working for Spencer on August 6 and he took all of the horses and equipment with him.”

Golding has strenuously denied taking any management role at the stables, describing himself as a “patron”.

Companies House documents say ownership and directorship of River Lodge transferred from Sanctuary to another man, Sean Cubitt, in January of this year. The company name was subsequently changed to FS Equestrian.

LCF joint administrator Colin Hardman said the horses FS management claims belong to it are worth “very substantially below the value of the LCF loan” and “significantly below” the number and value of horses FS told LCF were there before the lender went into administration. Also, “management of FS Equestrian is not currently assisting us adequately with our enquiries in this respect and we will have to escalate our issues with Cubitt if he does not co-operate immediately.”

Cubitt also lists himself as the director of another firm, HF Sport Horses, in the name of John Lyle Cubitt.  He and Golding did not respond to requests for comment.

The administrators’ most recent report said it was seeking legal advice on any personal liability Golding may have with regard to the debt.

For bondholders, repayment can’t come soon enough. 

As victim Mahendra Bajaj says: “I cannot believe our money was invested in horses in the first place. It just looks like our money was squandered.”

 

4. US – FinTech

 

Private Equity Wire carries an announcement:

 

“Pegasus Tech Ventures, a global venture capital firm based in Silicon Valley, is making its official debut as a Venture Capital-as-a-Service (VCaaS) provider. 

The firm takes a novel approach through its VCaaS model, managing multiple funds for well-known, global corporations that wish to partner with cutting-edge technology startups. Pegasus will vet investment opportunities for its partners, manage the investments, then connect portfolio companies to its ecosystem of global corporate partners to accelerate growth.

The Pegasus team has invested in more than 140 startups in North America, Europe, and Asia that have pathbreaking innovations across a broad spectrum of sectors, including IT, HealthTech, Artificial Intelligence, IoT, Robotics, Big Data, Quantum Computing, FinTech, and Next Generation Technologies. Pegasus’ partner network includes over 30 global corporations, such as ASUS in Taiwan and Sega in Japan. These corporations are relying on Pegasus to find and fund leading technology startups with the aim of creating partnerships that generate win-win-win outcomes – a win for the startup, a win for the corporate partner, and a win for Pegasus.”

5. US – FinTech

Facebook is considering a digital token of its own, according to reports.

 

“Social media giant Facebook is seeking investments worth $1 billion for its rumored cryptocurrency stablecoin, the Wall Street Journal (WSJ) reported on May 3.

Citing people familiar with the plans, the publication revealed Facebook was currently talking to major payment networks Visa and MasterCard about potential support, along with payment processor First Data Corp.

The cryptocurrency project, dubbed “FB Coin,” has fuelled rumors for around a year that Facebook wants to provide in-house payments to users. As more information trickles down to the outside, it appears various options are under consideration by executives, including payments via a user’s Facebook profile.

“Facebook is also talking to e-commerce companies and apps about accepting the coin, and would seek smaller financial investments from those partners, one of the people said,” the WSJ added.”

6. International – FinTech

Cryptocurrency Guide reports:

 

“Surprisingly, several newcomers appear to be overtaking incumbent players in terms of reported trading volume. Many new exchanges - including BitMax, Fcoin, Coinbene, ZB.com, Fatbtc, LBank, and Bibox -have all reported trading volumes greater than established players such as Binance, Kraken, and Bitfinex.”