Investment platform provider ShareIn raised more than half a million pounds of new equity at the end of last year, to ensure it meets the regulator’s capital adequacy requirements.
According to its results for the year to the end of October 2021, the Edinburgh-based company issued 141,338 shares of £0.01 each for a total of £503,870.
Under current rules, following an internal capital adequacy assessment process, the Financial Conduct Authority (FCA) can determine whether or not a firm requires additional capital because of its risk profile and set an Individual Capital Guidance, or ICG, for that specific firm.
ShareIn was issued with an ICG in September 2021, which meant that until it raised the new equity, its tier 1 capital was less than what the regulator determined the business would need. The ICG required ShareIn to hold enough capital to cover its credit, operational and business risk, as well as a management and governance scalar, in addition to its pillar 1 capital, which meant that it had a deficit of £91,980.
This equity fundraise also means that the platform has plenty of capital left to support its further growth plans.
“We’ve been redoubling our focus on direct investments and communicating the impact of those investments to investors,” said Jude Cook, co-founder and chief executive of ShareIn.
“This transparency, now more than ever, is critical for informed investment decisions. We’re making it easier for platforms to share investment impact. Communication and engagement build a collective sense of purpose that the platforms we work with are trying to facilitate.”
As the business looks to increase its focus on impact and sustainable investments, it will also expand the team, Cook added.
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In addition to the equity raise, ShareIn revealed that it recorded a pre-tax profit of £139,426, compared with a loss of £403,989 in 2020. Meanwhile, the company’s net assets have increased from £439,515 to £653,444.
Turnover was slightly down year-on-year, from £982,813 in 2020 to £916,034, but so were administrative expenses, which decreased by 39 per cent to just over £1m. The majority of the turnover comes from administration and technology services.
As regulatory requirements increased, ShareIn was among those firms that stopped offering appointed representative (AR) services to new clients, to focus on building out its direct investor technology platform instead.
In 2020, the AR business contributed £334,776 to the group’s annual turnover. This has halved to £112,800 in 2021.