Find out how Advancr Bonds are injecting investment experience back into the heart of Alternative Investing
The rise of Alternative Investment
Since the credit crunch of 2008 and the ensuing funding gap that was created for small and medium sized businesses by the withdrawal of traditional lenders from the sector, there has been an explosion of innovative, technology-led, funders entering the market. New technologies, including P2P platforms have fuelled a rise in popularity of the alternative investments sector. This has certainly helped to address the funding gap, and it has become common place for retail investors to invest in, or lend to, SMEs directly.
In 2015, private debt fundraising reached a six-year high, attracting $85.2 billion globally in capital commitments. The UK remains the largest and most dynamic market in Europe with a 45% share – In 2015, £2.7 billion was invested into regulated P2P and crowdfunding platforms in the UK, according to the Financial Conduct Authority. Furthermore it has recently become possible for investors to back alternative investments through the new Innovative Finance ISA which, given the added tax benefits, many pundits expect will drive further growth in the sector.
Challenge for Innovators
The alternative finance explosion has however not been without its challenges – some of which have probably not yet fully materialised. Many new entrants brought with them a solid grasp of the platform technology, but struggled to find the kind of underlying deal flow and build the kind of underwriting experience of the more traditional lenders, indeed, a lack of lending experience has contributed to a number of well-publicised failures.
Experience is the key
Whilst we don’t foresee a dot-com like meltdown any time soon, the sector is going to have to evolve in order to meet the challenges of 2017. As part of this evolution, investors are benefiting from a growing number of established investment funds creating alternative finance products, building on their intimate sector knowledge – and catching up with the online technologies of the newer platforms. Experienced lenders are embracing these new technologies, offering a better customer experience whilst maintaining their robust, high-quality underwriting processes, refined by years in the market.
Triple Point is one such lender. In 2006, Triple Point led the trend of direct lending and gave retail investors direct access to the kinds of alternative deal flow (such as professional leasing) previously only available to financial institutions. This was the first offering of its kind in the UK market and saw Triple Point begin to build the partnerships and networks that it has access to today.
Providing critical assets and funding
The key driver of Triple Point’s SME leasing and lending business is providing critical assets and funding, with a focus on generating regular, contractual cash flows, in order to produce predictable returns for investors. By ‘critical asset’ we mean something that a business cannot survive without, for example, a credit card payment terminal for a shop, or a key piece of production equipment for a manufacturer. After 10 years of building lasting partnerships, Triple Point now manages one of the largest privately capitalised leasing businesses in the UK, and is proud to have supported over 45,000 UK SMEs whilst consistently returning capital to investors promptly and predictably.
A new way to access Triple Point’s tried and tested deal flow
In 2016 Triple Point gave investors a new way to access this SME leasing and lending business when it launched Advancr Bonds, which combine new, online, platform technology with its existing, market leading experience in alternative finance.
Advancr Bonds offer up to 6.7% AER
Triple Point Advancr offers fixed-term, secured, bonds, with annual returns of up to 6.7%, subject to availability. Advancr Bonds can be purchased online and can also offer investors the option of tax free interest by investing through Triple Point’s Innovative Finance ISA. The platform has also been designed to facilitate Independent Financial Advisers who may seek to re-balance or add to their Client’s investment portfolios.
Advancr bonds are investments and your capital and interest are at risk.
Impact investment as an important part of your client’s investment portfolio
Ian McLennan, Partner and Investment Lead at Triple Point, speaks to Intelligent Partnership about t...
Impact Investment a ‘Win-Win’ for both investors and advisers
A more principled approach to investing is a key theme sweeping markets. However, most of the ethica...
What is driving the nice-ification of investment?
Written by Rebecca O'Connor for "Good with Money"Trends usually start with a small group o...