Peer-to-peer marketplace LendInvest will launch a listed fund, the first such vehicle to focus on property-backed P2P lending, according to the Financial Times. Depending on market conditions, the company plans to launch the fund in early 2016.
LendInvest seeks to raise £150m for the float of the fund, listed in London, say people familiar with the launch. The FT notes,
It will target an eight per cent annual yield, mainly through loans made on the LendInvest platform, which currently consist of bridging loans of up to 36 months secured against residential properties.
It will also hold equity in the platform itself, which hopes to list on the main London market and originated £250m of loans in the financial year 2014-15.
LendInvest said,
A listed fund is an attractive proposition and one that would make a lot of sense for our business.
The total value of the 698 properties funded through LendInvest is £685m, according to the website. Money invested through LendInvest totals £390m, with an average net return to investors of 7.21 percent per annum. According to the FT story, LendInvest currently has 10 percent of the UK short-term mortgage market, with average loan terms of seven to eight months.
Led by co-founders Christian Faes and Ian Thomas, LendInvest actually sprung out of short-term mortgage company Montello Bridging Finance, which became recognized as one of the top short-term mortgage lenders in the UK.
LendInvest is not alone in raising funds for a listed fund; Funding Circle is also doing so. The FT notes,
The existing alternative lending investment trusts — P2P Global Investments, VPC Specialty Lending, and Ranger Direct Lending — are all trading at premiums; the largest, P2P Global Investments, is currently yielding 4.6 per cent. Lendinvest has not so far given these funds access to its platform.
For a broader perspective, P2P investment trusts have raised more than £1.2bn since the first such fund launched last year. Property loans are among the fastest-growing segments in the lending industry, which has originated almost £2bn of loans in the year to date, according to the FT.
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