WELLESLEY has confirmed that it is winding down its peer-to-peer lending and mini-bond products as it shifts towards listed bonds.
The alternative property development lender, which received Financial Conduct Authority (FCA) authorisation earlier this month, stopped accepting new money into its P2P product in May 2017 and had previously indicated that it was planning to re-launch the offering.
However, it has since decided that the listed bond model is more appropriate for the business and its investors.
“We feel that listed bonds are the future for Wellesley, given the very niche type of lending we do,” Andrew Turnbull, managing director of Wellesley, told Peer2Peer Finance News.
“There are plenty of great P2P lenders out there and we think the industry is going to do very well, but bonds work better for large property development loans.”
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Wellesley withdrew its application for full P2P authorisation, meaning that its P2P business is still operating on interim permissions as it runs down the loanbook.
It has now received a range of full permissions from the City watchdog, enabling it to arrange investments and act as a custodian.
“This means that our customers can stay within Wellesley walls rather than have to find a third-party stockbroker,” Turnbull said.
Wellesley will be exiting the mini-bond market in the coming months.
“While our products are performing well, we think offering regulated, listed bonds is an attractive place to be,” Turnbull said.
“These fully-regulated products come with a full prospectus and give extra protection to the investor.”
Wellesley currently offers one listed bond and is preparing to launch more of these products.
It said in a note to investors that it is developing an ISA-eligible bond in response to customer feedback.
All of Wellesley’s customers will be able to switch their existing investments into a like-for-like, regulated, listed bond for no charge and will receive the same rate, Turnbull said.