Assetz Capital is looking into initiatives to both improve liquidity and possibly restart lending from its access accounts.
In March, the peer-to-peer lending platform temporarily paused payments to investors from its automated lending accounts after being hit by increased withdrawal requests at the height of the Covid-19 pandemic.
In a panel Q&A for investors, the management team said that looking at new initiatives is important in order to keep the loanbook fresh, improve diversification and ensure it is not in any kind of run-off situation for lenders wanting to continue to invest.
The platform expects liquidity will return in the future once investor appetite to deposit funds into the accounts returns.
“Like other investments in illiquid underlying assets, we certainly have slow withdrawals at present, but we continue to work hard in the background on new initiatives to improve the speed of withdrawals from the access accounts,” Martin Heelam, director of investor relationships at Assetz Capital, said in the Q&A.
“We expect the accounts to be liquid for much of each economic cycle, but to see slowdowns with respect to withdrawal times in the more difficult period at the end of each cycle.”
“In the end, the access accounts rely on net balance in investor withdrawal requests versus new investment and that seems to be mainly influenced by the path the virus takes and on the government’s and peoples’ response to that,” Stuart Law, chief executive of Assetz Capital, said.
“We trust that the target interest rates that we generate will soon again become very appealing to people versus a substantially and rapidly improved economy.”
Read more: Assetz extends lender fee again
Assetz Capital said it expects future tranche funding to be covered, thanks to its lending under the coronavirus business interruption loan scheme, substantial drawdowns paid over recent months and the growth in the cash balances of the access accounts, which have now reached £26m.
Read more: Assetz Capital resumes retail lending
“And we expect to see that forecast proven over coming months,” Law said.
“This means that we can now consider accelerating slightly withdrawals in the coming months but the primary liquidity for the latter will need to come from new investment if people wish to withdraw very quickly, as has always been the case with these accounts in normal market conditions.”