Assetz welcomes inflation-squeezed investors
Peer-to-peer platforms are braced for an influx of new retail money in the coming months and years, as rising inflation, stock market volatility, and a new campaign by the City regulator make P2P investing even more attractive.
But Stuart Law, chief executive of Assetz Capital, has urged incoming investors to choose their P2P partner wisely. This means that before investing any money in a new platform, investors need to look at the company’s management structure, and its ability to grow slowly and sustainably.
“At Assetz Capital, we’ve always invested – at great cost to our profits – in our team, in our processes, and all the systems so that we’ve got a better chance of being around in the future,” says Law. “That’s how we’ve always done it and it’s a very expensive approach.
“P2P investing is a bit like running across a battlefield with or without a suit of armour. What are the chances of you running across that field of battle without a suit of armour and surviving? Minimal. When you wear the suit of armour, your chances of survival are a lot better, but you can’t go as fast.
“That’s how I see the governance, the board of directors, the investment in credit and the experience of P2P platforms. It’s about putting on a really good, solid suit of armour to protect both yourself and your stakeholders.”
Good governance has helped Assetz to become the largest and most popular retail lending platform in the UK, with almost £1.5bn loaned. The Assetz Group now employs 130 people, managing hundreds of millions of pounds of individuals’ money, as well as hundreds of millions in institutional money.
And against a backdrop of rising inflation, low cash savings rates and stock market volatility, Law is anticipating a rush of new retail money to come onto his platform. Law believes that inflation has not yet peaked, and he can’t see a return to two per cent inflation in the near future. He has predicted that base rates are likely to peak at one per cent at the highest, which means that savers face at least another few years of stagnating savings.
In response to this, the Financial Conduct Authority (FCA) is encouraging more people to actively invest their money, rather than allowing it to passively lose value in a cash savings account. “One of the FCA’s main purposes is to avoid consumer harm,” explains Law. “It’s very harmful for consumers to leave too much money in savings accounts because they are going to lose so much money against inflation.
“We are in a strong place, and as the largest retail platform, we would welcome plenty more investors on.”
Assetz was one of the few P2P platforms which was approved to offer both the coronavirus business interruption loan scheme and the recovery loan scheme, which means that it has gone through a strict due diligence process by the government owned British Business Bank.
“Those institutions never lend money to people they don’t trust,” he says. “They lift all the floorboards up and check you out. All those things should give investors comfort.”
In the months ahead, Assetz plans to ramp up its retail opportunities and start raising money to grow the platform even more. For interest starved investors, Assetz can offer a home for their money, on a large and growing platform that will always prioritise good governance.