1.UK – P2P
P2P Finance News says that P2P is popular for equity raises.
“PEER-TO-PEER lending has been given a further stamp of approval thanks to a flurry of fundraises this year on equity crowdfunding platforms.
Not only are investors keen to fund loans via P2P platforms, they’re keen to buy stakes in them as well.
Here we round up some of the latest, oversubscribed fundraising campaigns.
Asset-backed P2P lender Ablrate launched a £350,000 fundraise on Crowdcube in January and smashed through its target. It has now raised £457,950 from 275 investors, which it will use to scale up its lending.
Online property investment platform CapitalRise launched its crowdfunding campaign on Seedrs in March, exceeding its £1.5m target to raise almost £2.4m. It plans to use the proceeds to expand its team and invest in marketing activities, in order to scale up the business and reach its £100m cumulative lending target.
P2P property lender CrowdProperty was targeting £600m in its March crowdfunding campaign on Seedrs, but has now raised almost £1.1m. CrowdProperty said the fundraising was especially popular among existing customers – both lenders and borrowers on the platform.
The latest P2P lender to embark on a fresh equity crowdfunding round is P2P business lender Assetz Capital. It is aiming to raise £1m through its third campaign with Seedrs to support its staff and product expansion plans and has already raised £826,160, so there is still time to get involved.
Brickowner recently revealed that it is planning another fundraising round later this year, as part of a range of changes at the property investment platform. Brickowner, which launched in 2017, has raised £4.9m from five previous funding rounds
It raised more than £200,000 in a crowdfunding round on Seedrs last year, exceeding its £150,000 target.”
2. UK – P2P/IFISA
Peer2Peer Finance News looks at moves in the IFISA market, including a Money&Co. initiative.
“ISA SEASON may be a distant memory but there are still tax-wrapper product launches to look forward to in the coming weeks.
At least three peer-to-peer lenders are set to launch Innovative Finance ISAs (IFISA) in the near future, giving investors a wider choice of products and the opportunity to get their tax-free returns in early.
P2P consumer lender Elfin Market has said it will begin offering an IFISA account “within weeks.”
Founder and chief executive Mansour Bouaziz said that the IFISA account will initially be available to the first 10 members on the 1800-person strong waiting list. Each week, another group of investors will be invited to access the IFISA, and each week Elfin will increase the number of investors who are onboarded.
For a minimum investment of £100, the IFISA will allow investors to earn returns of between 3.8 per cent and 5.8 per cent by investing in the Elfin Purse, an online credit facility that aims to disrupt the credit card market.
Meanwhile, business P2P lender Growth Street’s tax wrapper is expected imminently.
Its chief executive Greg Carter told investors last month that the product would be out in “a few more weeks.”
It will offer a fixed rate of 5.8 per cent with a one-year term.
It will be a flexible ISA, meaning that investors can withdraw their money and put it back in again within the same tax year. Investors can also transfer previous years’ ISAs into the Growth Street ISA.
And finally, Money&Co is introducing a managed portfolio product that it says will offer extra security to investors by ensuring more diversification.
The P2P business lender is planning to discontinue single-loan offerings in favour of an IFISA-eligible “portfolio approach”.
3. UK – AltFi
The Times follows up an old Evening Standard story on the LCF scandal.
“Property assets worth millions of pounds owned by individuals with links to London Capital & Finance, the investment firm that collapsed earlier this year, have been frozen by the Serious Fraud Office.
Records filed with the Land Registry show that a number of properties had restraint orders placed on them by the SFO in March. The orders were made under the Proceeds of Crime Act 2002 and block the assets from being sold.
The moves by the fraud office were first reported by the Evening Standard.”
… and then there’s this, which tells us something more. How much more is open to debate.
“A former lord mayor of Birmingham is a shareholder in a company that has become embroiled in concerns about investment firms in the fallout from the London Capital & Finance scandal.
Records filed at Companies House show that Sir Bernard Zissman is a shareholder in Asset Life, a company that raises money for investments by selling high-interest debentures.
Sir Bernard, 84, became lord mayor in 1990 and is a former leader of the Conservative group on Birmingham city council.”
Here’s a third from the Sunday Times:
“Today, Money exposes the businessman at the centre of a series of investment mis-selling scandals that have left savers nursing hundreds of thousands of pounds of losses. Bradley Lincoln, who is chief executive of Best International Group, developed bonds to raise funds for projects such as a sustainable energy plant in Wales and car parks in Dubai.
He encouraged ordinary investors to pour cash into the high-risk products, at least three of which have failed. Other schemes, which owe millions of pounds to investors, have assets of just £1.
One investor was London & Capital Finance, the collapsed bond firm at the cenre of an investigation by the FCA.”
4. UK – AltFi
An independent financial adviser weighs in in Money Marketing on the shortcomings of the FCA and the FSCS.
“The regulation of financial services has been delivered by a range of players tasked with consumer protection in the sector; SIB, LAUTRO, FIMBRA, PIA and the FSA have all morphed over time and are now replaced by the FCA.
But I would argue that the consumer today is no better protected than they were in the “wild west” days 30-odd years ago. Recently commenting on the debacle of mini-bond firm London Capital & Finance, West Riding Personal Financial Solutions owner Neil Liversidge used an expression that resonated with me. He referred to the Financial Services Compensation Scheme as the “failed regulation tax”.
How true is that? After decades of financial services regulation costing many billions of pounds, consumers are still being scammed out of their hard-earned cash and sold inappropriate – and often unregulated – investments that are simply a way of changing their money into someone else’s.
What is the regulatory knee-jerk response to this? Usually, it is to carry out some sort of review.
This is generally followed by some sort of consultation, which then leads on to the introduction of more rules and guidance.
True, it is a complex financial world out there, but what we really need is some simple, high-level regulation.
FCA chief executive Andrew Bailey has recently spoken of a need for outcomes-based regulation. It is almost as if he has found a copy of a predecessor’s speech in his desk drawer.
Get rid of the FCA rulebook and replace it with a simple code of behaviour that focuses on suitability for the client and transparency of such things as risk and cost. Just bin the rest of it; it is just noise that does little to protect the consumer.
Saying that, it would take a pretty substantial change in thinking by the people at the top of the regulatory food chain. They would have to give up their empire building and see their budgets slashed by having to focus on one simple question: is regulation actually working for the consumer?
They would have to accept that, when the FSCS pays out money, it is a sign not of a competent and effective regulatory system but of the exact opposite – of regulatory failure.”
5. International – FinTech
The Hamilton Spectator says central bankers are worried about their futures because of cryptocurrencies.
“According to the University of Cambridge Centre for Alternative Finance, the adoption of cryptocurrencies more than doubled in 2018, after quadrupling in 2017. The 2018 growth proceeded during the so-called "crypto winter" so even a severe bear market struggled to shake new users. The market capitalization of roughly 2,000 known cryptocurrencies is US$187 billion.
That number will get a boost when the social-media behemoth Facebook starts offering its own digital currency to its 2.3 billion active users. Other messaging services, such as Slack and Telegram, are also planning digital currencies. Seeing the writing on the wall, even too-big-to-fail banks such as JPMorgan Chase are developing blockchain-based alternatives.
Faced with challenges to their monopolies, central bankers have been pondering how to stave off the competitors. Some nations have tried banning alternative currencies. One idea floated by the Bank of Canada, which confuses the purpose of cryptocurrencies, is to release its own central bank digital currency (CBDC).
The sense of urgency in the Bank of Canada paper is palpable: "It is essential to make progress on the many unanswered questions related to whether the central bank should issue a CBDC, before some inadequate private digital currency gains traction as the de facto currency of an economy."
The International Monetary Fund — a lender and mediator between national economies — is also eyeing the competitors closely. Its chief, Christine Lagarde, showed up at the Singapore FinTech Festival in November 2018 to give a landmark speech: "Winds of Change: The Case for New Digital Currency."
6. International – FinTech
Crowdfund Insider reports a Microsoft intervention in cryptoland.
“Microsoft, which, in cooperation with the Decentralized Identity Foundation, says it has created “a public, permission-less, open” digital ID network built as “a second layer” on Bitcoin, arguably the world’s most established and most genuine “decentralized” peer-to-peer network.
The 28 “decentralized identity” projects mentioned previously were all built on Ethereum, an ambitious network often accused by detractors of being centralized, overly complex, weak, and unscalable.
Fans of Ethereum have countered that Bitcoin is a dinosaur that also cannot scale, and so far many DID projects built on Ethereum have resigned themselves to operating in a private manner, at least until they can solve various scaling, governance and staking issues, they say.
And though Bitcoin may seem a more reliable prospect for DID for those familiar with it, Ari Juels, a professor at Cornell, told Wired he thinks Microsoft’s choice of Bitcoin is nonetheless surprising.”