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Peer2Peer Finance News | January 23, 2019

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Octopus Choice diversification sees investors backing 130 loans on average

Octopus Choice diversification sees investors backing 130 loans on average
Marc Shoffman

OCTOPUS Choice investors are seeing their money spread across an average of 130 different buy-to-let and bridging loans, the peer-to-peer lender has revealed.

The platform has highlighted its approach to diversification, explaining that investors who have been backing loans for more than a year have helped fund 130 loans, on average.

If you make a new investment of £600 or more, Octopus Choice said, your funds should instantly be spread across up to 60 different loans, up from a previous target of 30.

Read more: Octopus Choice passes £315m of lending

Read more: Octopus Choice gains full FCA authorisation

“Because your capital is invested in a broader portfolio of loans, it is likely that less of your investment will be affected if any loan goes on hold,” Octopus Choice said.

“This is something we are able to do as we grow and fund more loans, giving us a larger portfolio and greater opportunity to diversify. But it’s important to note this may not last, as the amount of loans we have available may change over time.”

The platform added that it also operates a ‘first loss’ position, in which Octopus Choice invests five per cent in every loan, and will only make a return after investors have got back all their money and earned all of their interest.

The platform has had zero losses on loans so far since launch in 2016.

Read more: Octopus Choice generates £5m interest for investors