David Turner, co-founder and head of lender relationships at Invest & Fund, reveals how a deep credit understanding and strong track record has allowed it to grow its IFISA subscriptions.
Invest and Fund expects the first quarter of 2021 to be its best quarter yet, thanks to strong demand for its Innovative Finance ISA (IFISA).
David Turner (pictured), co-founder and head of lender relationships at Invest & Fund, says that the firm “had a good, strong month in December” despite minimal marketing of its IFISA products.
“We remained very passive with no active promotion over the last year,” says Turner. “So what we’ve seen over the last year was a steady, positive inflow of IFISA cash. And now we’re looking to ramp our activity up.”
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The success of Invest & Fund’s IFISA owes a lot to the platform’s track record. The lender has never lost any investor capital or interest, and its resale market has remained open throughout the Covid-19 pandemic.
The resale market continued to see good demand for its loans which meant that all loans posted went quickly, and that remains the case today.
“We’ve never had anybody not get their cash back within hours,” says Turner.
“It might take up to 72 hours. But when any loan inventory went up onto the onto the resale market, it sold. It’s an active market.”
Turner believes that the popularity of Invest & Fund’s products is down to the platform’s deep fundamental credit approach and robust risk parameters.
“Because of our history, a lot of people will sign up to what we term a mandate,” explains Turner.
“And assuming it meets their criteria, then when the loan becomes available, people will get allocated a loan part depending on the amount of money in their account and obviously the oversubscription of that loan at that particular time.”
All of Invest & Fund’s IFISA-eligible loans have been taken up by lenders and are generally oversubscribed.
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Turner believes that the platform has benefitted from the consolidation of the IFISA market over the past year, as well as the trust that it has earned from its existing investors.
“Credit is very much front and centre of what we do,” says Turner.
“It really is part of our DNA and our lenders’ money is of the utmost importance to us.”
Invest & Fund’s deep credit-assessment process is central to its success. As Turner says, it is the reason why the platform’s investors are comfortable with the risk involved and understand the type of lending on offer.
“Our business development managers are our front line, they are highly experienced and intimately understand the needs and demands on developers,” he explains. “Invest & Fund’s speed and responsiveness are a clear differentiator, and they go out and meet every potential borrower face to face.
“All applications go through multiple levels of assessment and deep due diligence, the rigour on credit assessment is at the core of our model.
“Once that’s achieved, we will put it on the platform for lenders to bid on,” he adds. “But because of our track record and history, a lot of lenders are very comfortable that if it’s passed through our credit process, they will allow us to lend via their mandate.”
This process has allowed Invest & Fund’s IFISA investors to earn a minimum gross return of 6.5 per cent, with no losses recorded to date, so it’s no surprise to learn that there has been an increasing number of IFISA enquiries at the platform.
“There really has been a positive and steady increase in in demand for the IFISA and as other platforms change their models, we have been the beneficiary of that, without a doubt,” adds Turner.
“If you’re a lender looking for good, risk-adjusted returns, low volatility and with a strong asset behind it, we are the ideal place to come to.”