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Peer2Peer Finance News | June 22, 2017

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P2PGI shifts focus to asset-backed loans

P2PGI shifts focus to asset-backed loans
Marc Shoffman

P2P GLOBAL Investments (P2PGI) is increasing its focus on asset-backed lending.

Simon Champ, chief executive of MW Eaglewood, which manages the London-listed fund, said investing in asset-backed lending had always been an aim and that opportunities were now presenting themselves.

“P2PGI focuses on prime lending; as such the fund has gradually increased its investments in the asset-backed lending sector,” said Champ. “The opportunity set for disintermediated lending is broadening to include loans supported by property, invoices and other assets and the manager believes these areas will offer attractive risk-adjusted returns. We expect an increasing proportion of future investment to be in these areas.”

It comes after Champ told Peer-to-Peer Finance News that the fund would shift its focus away from US consumer loans towards the UK, SME loans, trade and asset-backed finance.

P2PGI launched in 2014 and was the first investment trust focusing on the sector, initially placing money with consumer-focused platforms such as RateSetter and Funding Circle.

But it has also been working on deals with asset-backed platforms in the property and invoice finance space.

Read more: P2PGI diversifies to boost disappointing net asset value

For example, the fund has backed residential development platform Zorin Finance, which issued loans on more than 350 properties in 2016.

Champ declined to say how much the allocation to property would increase by, but factsheets from the investment trust show that in June 2016, 3.3 per cent of the portfolio was in European real estate, rising to 4.45 per cent by August and 5.37 per cent in October.

The investment trust’s third-quarter report also signalled a move towards asset-backed investments. “Adding such exposures to the fund will diversify its portfolio and over time, reduce the performance volatility driven by the level of seasoning of the loan book in each reporting period,” it said.

Read more: P2P investment trusts present a golden opportunity