As part of our regular look at mainstream investment in the alternative finance sector – especially platform lending – we look at a take-over battle involving an investment trust that invests in the sector. Our consistent message continues to be that investors who acquaint themselves with the risks of platform lending can be relatively sure of good returns by investing in conservatively managed products on offer in the sector.
Shares in Pollen Street’s Secured Lending fund (PSSL) jumped this morning as news broke that the fund has received a 900p all-cash approach from Waterfall Asset Management.
According to PSSL’s board the fund’s largest shareholder Invesco has set out its intention to support Waterfall should the offer materialise.
The potential deal, which represents an 8.7 per cent premium to PSSL’s Monday share price of 828p, was revealed this morning along with news that PSSL’s board are looking to terminate its relationship with existing fund manager Pollen Street.
Serving notice to Pollen Street was necessary in the board’s view due to “serious governance issues” including that the board was “unable to obtain from the Manager all of the Company’s own documentation and information” in order to explore the takeover offer.
Pollen Street, led by CEO Lindsey McMurray, this morning hit back at the accusations saying that “we have little confidence in the Board being able to manage the release of highly commercially sensitive information” which it had been requesting.
Yes You Can, rated B, for £30,000 with an 11 per cent fixed yield over five years, is now filled. Project Rhapsody rated A+, with an 8 per cent fixed yield for three years is also filled. More loan offerings will land on site soon.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 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 2019/20 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.