Octopus Investments has stopped all transactions from its property-backed peer-to-peer platform, Octopus Choice.
This includes all new investments and withdrawals.
The company said that the decision has been taken in order to protect the best interests of its investors. Because of the extreme market conditions, the platform has seen a higher volume of investors trying to sell down or liquidate their investments in recent days.
Octopus Choice will no longer take a platform fee, which will instead be added to investor returns.
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The platform said it will endeavour to return capital back to investors as soon as possible for outstanding and future withdrawal requests.
“We made the very difficult decision to stop all transactions for Octopus Choice, which we believe is in the best interests of investors in the current and unprecedented market conditions,” said Ruth Handcock, chief executive of Octopus Investments.
“We did not take this decision lightly and we are acutely aware that the lack of immediate liquidity may cause further challenges for investors.
“That’s why, going forward, Octopus will not be taking a fee from the Choice platform. Instead, this will be used to increase returns to all investors.
“While we clearly can’t predict the future, the current loans have been performing as expected.
“We have always been very cautious about the loan-to-value (LTV) across the portfolio and there is a significant buffer in place for investors, even if the current market turmoil continues.”
The current loan portfolio will continue to be monitored and serviced as normal, and interest will continue to be paid and credited to investor accounts.
As individual loans mature, the proceeds will be returned to investors as cash, rather than being reinvested.
Money invested into the Choice Innovative Finance ISA (IFISA) will be kept within the ISA wrapper and Octopus will work with investors to complete ISA transfers as needed.
As soon as more normal market conditions return, the company said it said will do everything it can to return the platform to the expected level of liquidity.