Takeover War As Mainstream Fights Over AltFi Investment Trust

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.

Our friends at AltFi report the takeover saga.

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.

Animosity between the fund manager and board was aired in public earlier this year when Pollen Street recommended a dividend raise to the market, only to be shot down by the PSSL board.

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.

Loan Offer Latest

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

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

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.

  • Money&Co. has been lending for over 5 years and has only had one bad debt so far, representing a bad debt rate of 0.03 per cent per annum.

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:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

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.



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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.