LENDY was not the first peer-to-peer platform to go into administration, and it probably won’t be the last.
The property lender was officially handed over to administrators RSM last week, after the Financial Conduct Authority (FCA) opened an investigation into management practices at the firm.
Lendy’s collapse has – understandably – left investors feeling anxious about the status of their funds and when they might see their capital returned. So we thought it may be worth taking a look back at the fallout that followed a few other high-profile platform closures…
2015: TrustBuddy becomes the first P2P platform to go bankrupt
TrustBuddy was the first listed P2P platform in Europe. The Swedish firm was hugely ambitious, and launched a UK version of its platform in 2014, promising returns of up to 12 per cent for retail investors. Around £23m was invested though the platform, before “serious misconduct” was revealed, and the platform’s regulatory permissions were revoked.
In October 2015, TrustBuddy went into administration with millions of pounds still outstanding to investors. The following year, legal firm Lindahl announced that outstanding loans had been sold off for just 25 per cent of their value, leaving many lenders out of pocket.
2017: Trillion Fund puts itself up for sale
Renewable energy platform Trillion Fund put itself up for sale in March 2017 after an end to wind farm subsidies meant that the business was no longer viable. Trillion Fund allowed lenders to invest in renewable energy projects across the UK, but after government subsidiaries were withdrawn in 2015, the platform stopped listing loans.
However, the platform worked hard for investors until the end, closing its doors earlier this year without a single investor loss. In the absence of a buyer, Trillion Fund opted to donate its technology to charity.
2018: Collateral winds down
Arguably the most high-profile P2P closure (at least until Lendy), Collateral was forced to shut down after it was discovered to be acting without proper regulatory permissions. BDO was appointed in April 2018 to manage the administration process, but six months later investors had still not received any clarity on how much of their money could be recovered.
January 2019: GLI Finance shutters Sancus Finance
Sancus Finance was unveiled in January 2017 after parent company GLI Finance rebranded its invoice finance company Platform Black and expanded its remit to include short, medium and long term finance to SMEs and their owners, supply chain finance, education finance and secured loans.
However, by February 2019, GLI had made the decision to wind down the platform due to worsening market conditions and a £1.1m hit from an insolvent borrower.
May 2019: Lendy enters administration
Lendy’s closure has sent ripples of concern around the industry. A high-profile lender which sponsored the famed Cowes Week regatta, it had accrued more than £160m on its loan book by the time the administrators were called in May 2019. Of this, £90m was believed to be in default.
Investors have taken to social media and financial forums to express their concern around the status of their capital, but information from administrators RSM has been limited, to date.