The Covid-19 crisis could lead investors to review their portfolio and consider Innovative Finance ISAs (IFISAs), according to the head of a property bond provider.
Simon Lenney, independent chairman of Maven Bonds, said that low interest rates on cash ISAs and continued stock market volatility will lead investors to look elsewhere.
“When things settle down, people will review their whole investment model and think about what offers a decent return and is as safe as can be, and will think about IFISAs more,” Lenney said.
“As far as ISAs are concerned, low rates from cash ISAs and stock market volatility leaves P2P, green energy and asset-backed IFISAs as alternative sources for investors to look at.”
Maven Bonds is backed by Maven Capital Partners, an alternative asset manager with more than £600m under management, and technology-led investment firm Growth Capital Ventures. It offers asset-backed property bonds which can be held in an IFISA wrapper, available solely to sophisticated, high-net-worth or professional investors.
Lenney said that IFISAs should be considered as part of a balanced portfolio and investors should conduct their due diligence on the provider first, considering the experience of the team, whether it is well funded and the transparency of its operations.
He said that with banks struggling to deal with the huge number of applications for the coronavirus business interruption loan scheme, the alternative finance market has a role to play in what will hopefully be a pretty swift recovery.
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“Banks don’t have the resources to deal with it quickly,” Lenney said.
“The government needs to sort out the competition for quick access to the cash and the P2P market has a role to play certainly around small businesses.
“There is a role to play as part of a mixed group.”