There was not a lot going on in recent weeks at Reinvest 24. But this week will be big. A new project is going live, secondary market will be introduced and a cashback campaign is running until March 11. Cashback is applicable to existing and new investors. 0.5% Cashback is paid for total investments from Euro 500 and 1 percent for total investments of 1k. You can spread your investment over all available projects for diversification. Only the total invested amount counts . Follow me to Reinvest24.
Swaper announces ambitious goals
During 2018 Swaper originated loans worth 34 millions Euros, according to them. Despite this impressive number, lots of investors had to deal with cash drag. Swaper now announced that they will originate 54 millions of loans in 2019. The increase of loan supply will be seen this week. Fingers crossed 😉
Crowdestor thrives and offers high yields
As announced by Crowdestor some weeks ago, the pipeline of new projects is full. Lots of projects were financed within hours or few days. Mostly the high yielding ones were sold out quickly. On Thursday evening the new project Saapio will go live to get funding for their european expansion.. My gut tells me, that with 18 percent interest rate (which you get from start), this project will be funded within hours. So if you want to participate, send the money early.Follow me to Crowdestor.
Kuetzal: a new (mostly) high yielding platform
Some weeks ago I discovered this marketplace with this awkward name and I invested for testing purposes. Later this week I will post a review of the platform and let you know why they chose this name. Some facts in advance: Minimal investment 100 Euro, interest accrues from day one. The projects will be financed for sure as the marketplace has credit lines with banks and angel investors. There is a buyback with 10 percent penalty, We know this feature from Envestio for example. Take a look at their projects over here .
This was it for now, stay tuned, more to come this week.
Today I decided to shortly introduce three new platforms to you. Of course, you should have in mind that one blogpost is way too little to describe all three platforms in a detailed way (particularly because I only registered on two of those three during the last days). This is the reason why you will only get a short introduction. A more detailed report will follow during the next days and weeks. So, let’s start:
Reinvest24 – Real Estate among the Baltic States with rental income
I always asked myself why there are no marketplaces in the Baltic States which allow investors to buy real estates and rent them. In Great Britain this kind of model is very common. That is why Reinvest24 is in its basic structures very similar to Property Partner. It is a very young platform and therefore open to investors only for a couple of months. I am already part of a project and received my first rental income previously. Concerning the second project I already placed a bid, but it will take a moment until it is financed completely. I will write a more detailed info blog for this platform during the following days. Before that you should take the chance and look a bit around. Via this link you can directly get to Reinvest24.
Bondster – P2P from Czech Republic with Buyback and Cashback
Like I mentioned before: this is a platform from the Czech Republic where you can invest Czech Crowns and Euros (here is a report concerning the development of both currencies). There are different kinds of loans you can find. The platform provides buyback in an exclusive category, as well. Self-explanatory, the buyback grasps after 60 days. But there is also an option to get out of the loan (like Envestio). Of course, you will have to pay a fee in this case. I am not sure yet who is the owner of this platform, but I saw that there is one partner of it which has a famous branding Name: ACEMA! This is a loan originator which already financed loans via Mintos. As well, this platform is under supervision by the Czech National Bank. The interest rates are with 10 per cent moderate (edit: they just added 12% loans). After three months new investors must pay an annual extra fee of 1 per cent which will be directly deducted from the interests. Like mentioned, in the first three months this extra fee will not be charged. Also, you will receive a 1% Cashback on your average investment during the first three months which you will be paid monthly – if you use for your registration the promo code 4985! This code you have to place in the field “referral code” on the bottom of the registration form. Furthermore, there is no retention. Here you can reach the platform of Bondster.
Debitum Network – P2P and Crypto made in Lithuania
This is the third platform I for today – even though I still do not have the complete view how it works. You can pay in Euros and Pounds but also crypto currencies. The crypto part will only be available after an identity proof. But you can also work in a normal way with Euro or Pound. Right now, I only see loans from Debifo (also this one we know from Mintos, Invoice Financeing). Like mentioned, I do not have the clue yet concerning this platform, but I try to work with it by investing a small amount. Via this link you can directly get to the Debitum Network.
This is it for today! Like always please write me if you have any questions. Like mentioned, as well, there will be more detailed experience reports in the following days and weeks.
On October 31st Lendix announced that they now are calling themselves october. First I thought it was a joke, but it is real ;). Their CEO explained the reasons in an email shortly after the announcement. In France legislation that allowed p2p was set up in October 2014. Lendix was founded in October. They want to differentiate themselves from their peers) and wanted to open their name and not limit it to “LEND”ix. Last but not least the CEO said that the name does not need to have a connection with the business and gave Apple as an example. Oh and October is understandable in many European languages. Actually I liked the name Lendix, but hey, I lend my money now on october.
Peerberry does no longer belong to Aventus Group
Maybe an older story but I wanted to mention it. Ausra, CEO of Peerberry, confirmed that the platform was sold to two European citiens. You can see it inthis video (at about 3m15s). This move is a little weird at first, but it does not mean to be negative at all. I really would like to know why this happened and what the reasons are. Maybe I will find out. At the moment my funds stay where they are.
Estateguru changed its appearence
Estateguru made themselves a fifth Birthday present and has now a new web and brand appearence. The new page is not free of errors and I am not easy navigating through it at the moment. I really hope this will be improved in the coming days. Nice is the new overview of the loans and more information is visualized. This does not change the fact that some loans are overdue or under administration. But this is just natural. If there is a problem with real estate loans, it takes time to solve.
Grupeer announces new loans for November
Grupeer is a victim of their own success. Really good growth numbers in volume and investors led to a situation where lots of loans where sold out. Good for the platform, not so good for us investors. The marketplace announced that they are working on new deals and we should see lots of them in November. Hopefully they come quick…
Do we have the p2p or crowdlending risks under control? This question keeps me busy from time to time. These high yields, buyback guarantees, the super easy autoinvests and all the fintech blah blah get me into maybe false security. Because of that I have compiled some problematic cases from the past months. I do not want to take the fun out of p2p, but we should consider not only the return part but the risk part as well. I just want to see this post as a reminder, that there is no free lunch, and double digit yields do not come without risks. The next default of a loan originator or a market place will happen. Maybe not tomorrow, but in the future.
Collateral – an ugly case
Let’s begin where p2p in Europe started, the United Kingdom. Zopa as the first platform in Europe has been operational since 2005, so for more then 13 years now. I figure that after all these years the p2p market has already matured a bit, furthermore as the FCA seemed be willing to help with regulation, rather then ban the whole thing. And exactly there it happens, Collateral defaults and the FCA does not look that good in handling this case. Here you can find a lot of discussions about this case.
It comes a litte surprisingly that until now no Baltic market place has defaulted. Firstly, this because there are lots of young platforms and secondly, they operate in a not quite regulated environment. I can envision that the money laundering scandal of Danske Bank in Estonia could lead to a crack down of p2p lending, or at least will be observed. I am sure that the Baltics will be closely monitored by the EU now. Although this Dankse case is not related to p2p, it will have an impact on regulation.
As I said earlier, it is not my intention to present p2p in a bad light, but for me these cases clearly show that there are not to underestimating risks. I have no problem, ok I can deal better with, when a loan originator defaults because they were bad in business. This happens, it sucks, but it is something we have to deal with while investing. So the golden rule for investing is: never invest anything, which you cannot afford to lose. With fraud cases I have my problems, there was a crime commited and in most cases there where too few controls, if any. I am still a believer in the p2p story, but we have to be cautious as lenders.
This was a question a reader sent me and I will try to answer this here, as the rate decline at Mintos affects lots of us (including me who has some cash sitting on the account). So, firstly keep calm and breathe, second analyze the situation. Payday and car loans yield now about 10 to 11 percent as it seems. At least this is what I saw during the last days. Some weeks ago the rates were lower. I see two possibilities: Either one arranges himself with the current state and is okay with lower returns (10% is still good), as you are still with an established p2p marketplace, which is profitable. Or you are searching for alternative investment opportunities. I will show some alternatives below (needless to say, there are more).
Peerberry is only a partial solution at the moment
Lots of investors seem to have moved their funds to Peerberry. My cash flows are now reinvested with a lag of one to two days. Alternatively the marketplace offers a real estate project, which yields 11%. I am expecting a further shortening of loans, but at the moments the situation is not that bad.Follow me to Peerberry and me to an older post about Peerberry.
Grupeer to the rescue?
With Grupeer you get your funds reinvested at 14 to 15 percent with a duration of some months to a year, of course including monthly interest payments and buyback. The marketplace countered the higher demand from investors with more loans. Here you can read some stuff about Grupper and with this link you get to the platform.
Iuvo works smoothly
Iuvo offers attractive interest rates, but the buyback covers only the principal, not the accrued interest. Sounds a bit uninteresting, but must not be like that. I checked the effect of that and came to a not so bad result. Further Iuvo offers a 90 Euro cashback, if you invest at least 2.5k Euro investiert (from 1k you get 30 Euro), this would cover for a lot of lost interest in the first year ;). You’ll find the cashback details in the posted link. Autoinvest works like a charm by the way.
Crowdestor just launched a new project…
… which pays 13 percent interest on a monthly basis. Interest accrues from the moment you make your bid, so it does not matter if there is an extended funding period. All projects are current or already paid back. At the beginning I was a bit skeptical about this marketplace, but I have to admit it developped quite good. You get a lot of details and descriptions for each project, I think it is worth checking out.Follow me to Crowdestor.
Bulkestate to offer 17 percent loan, with 3 months duration
Bulkestate will launch a 800k Euro 3 month loan on Tuesday, 28th August. This is a bridge finance of a mortgage und secured by property. If you are a big hitter you can get +1% with a bid of 10k or more, or 2% more with 25k, that makes 19% total. You can already check out the project on Bulkestate (click this link to get there).
Brickowner to offer 39% for two years
Just today Brickowner has launched a new development projects which is expected to yield 39 percent over 2 years. Please note, this is not a loan, but an equity project. Furthermore Brickowner offers 50 GBP cashback to new investors if you use this link to register and invest at least 1k GBP. You can spread that 1k on different projects, you just get paid the bonus only after reaching the threshold. To be transparent: I am a Brickowner (marginal) Equity holder, I bought shares in the company through seedrs last year.
Of course there is more
Envestio is a relatively new marketplace (and pays 0.5% cashback for 9 months, if this link is used to register) which I already know for some months, but was not convinced enough to try it out until some weeks ago. I will post a separate article about envestion in the next weeks (teaser: there are high yields, but high risks also). Then there is this platform which I recommend only to advanced investors, it is called Bondora 😉 Of course it is a well known platform, the oldest of continental Europe. You can invest manually, through autoinvest or api. Please keep in mind that the shown yield at the beginning looks fantastic, but will decrease over time, as there will be defaults, and these need time to recover. If you sell your good loans then as well as the bad ones this will probably result in a loss for you as you sell the good ones too cheap and they cannot create interest for you anymore. Better strategy is to let it roll and let the marketplace do its job. If you go manually, stick to Estonians and not only the high yielders… For the lazy guys there is this new product called gow and grow. I am still not a big fan of Bondora, but maybe it is something for you guys. In any case, you can get 5 Euro starting Bonus with this link.
I hope I was able to show you some alternatives which is no call to actually invest there. I am not a big fan of moving funds around every weeks, but sometimes I have to do it. And still I find Mintos a very good platform, especially for new investors. Of course there is more, I guess you will find something on this blog.
As I told you in January, I just have updated my update to the foreign currency development against the Euro. The Euro gained traction against most other currencies during the first quarter of 2018. There might be many reasons for that, I just want to point out three of them. 1) Economy looks good in the Eurozone (mostly all over) 2) There is a sense of politial stability in Europe at the moment and last but not least 3) The guy in the USA is always good for spreading some uncertainty (which drives Investors out of the USD into different valuta).
Again I had a look on a 10 year period, I just rolled one quarter further. This means we are looking not at the period from March 31st 2008 to March 30th 2018 (March 31st 2018 was a Saturday, so the period closes on Friday 30th). There were some changes which you can clearly spot in below illustration. Please note that the comparison is beetween 10 year periods, this means we are comparing December 31st 2007 to December 30th 2017 with March 31st 2008 to March 30th 2018.
As you can see the Euro gained strength againgst Swiss Francs, British Pound, Georgian Lari and the Australian Dollar. It lost a little bit against the Polish Zloty and the Czech Krona during the period. As the Danish Krona is pegged to the Euro, there was no change. Graphically it looks like this:
Most impressive are the Euro movements against the Swiss Franc and British Pound. As the Franc lost, the pound gained (so now may be the time to go into the Euro, if you are a GBP Investor ;)). GBP Investments gained nearly 8 percent in the last three months against the Euro. This shows really nice, that currencies can easely fluctuate in double digits in several weeks. During crisis the fluctuations normally are bigger (look at the annual tables below). It is not bad to think twice before going into a foreign currency. It might pay off, or not, but you need some mental strenght at some point to hold through ;). If you decide to buy some foreign currency, you should look for low change fees (low spreads). Most of the time your bank will charge you more then some specialised companies would. Check out Transferwise, Currencyfair (40 Euro Bonus) or Revolut.
here the othere currencies in tabular form:
This was it with the pdate to the currencies. If you want to have added more currencies to the overview, drop me a line. I will gladly take them into consideration. The next update will follow in July. Last but not least, appologies for the silence during the past weeks… I had some technical difficulties.
Today there is no new platform in focus, only some news and hints at cashback schemes. Collateral in administration
This week it happened, Collateral was unreachable. The marketplace seems to be insolvent (?) and is put under administration. It seems like the FCA declined to give a definitve licence for operations to Collateral after the temporary licence expired (and they still operated for one month without licence afterwards)…. Anyhow, I will take a deep look at this case and roll it up. At the moment there is not much to do but wait as an administrator is put in charge. I too have some money there. If the current loans are serviced by the borrowers, there is a chance that investors don’t lose any money at all. But for now we have to be patient as the funds are locked in for an extended period. It comes to me as surprise that this happened in the European’s most established p2p market Great Britain. This case shows that diversification is crucial and that no money should be lent that is needed short-term. Viventor offers 10 Euro Cashback
From now Viventor offers 10 Euro Cashback to new investors, if you invest at least 500 Euro for at least 30 days. If you went to Viventor through this blog, you will get the same offer after your 30 days are over. New investors can register here.
Currencyfair offers 40 Euro Cashback until April 1st
If you need to exchange some foreign currencies, now Currencyfair offers 40 Euro Cashback, if you exchange at least the equivalent of 2k Euro in any supported currency. This can happen with one ore more transactions, the only condition is that you use this link for registration. You can read here how Currencyfair works.
Estateguru now offers Spanish loans
Last week the first Spanish loan was funded on Estateguru. The property is located in Spain, but belongs to an Estonian Company. Therefor I don’t think we will see many Spanish loans in the near future. I stay in the Baltics with my investments, maybe I make an exeception if a “nice” Finnish loan turns up. At the moment new investors get 1% Cashback on their first three months investments. This will revert back to 0.5% as soon as there are 11’000 investors on the marketplace which should be the case in two to three weeks. Join here.
What can you expect from this blog in the near future?
I will make summaries of new marketplaces where I invested for a year or more (like Robocash for example). Plus there will be reviews of new marketplaces and an in depth look at Collateral. If you would like to have other topics covered, let me know.
This post is not about a specific marketplace, but the impact which investing in foreign currencies can have on our yield. Especially Mintos offers a lot of currencies to their investors to invest in. I have checked the development of some foreign currencies against the Euro during the past 10 years. It is a view of an Euro investor who invested in different currencies.
Why investing in foreign currencies?
There are lots of reasons, but I guess the main goal is to get access to higher yieldings. Higher coupons look more attractive then lowers. Who does not want to invest in 5 percent bonds, if you get only one percent in your home currency (to make it easier, I set coupon = yield to maturity, which is only true, if the bond price is at 100%)? It is not that simple though. The difference of 4% (5 – 1%) is without risk, exchange rate risk, which you onboard. It can be very quick and your 4 percent yield advantage ends up in smoke (usually higher yielding currencies weaken because of higher inflation expectations etc), or you are lucky and your chosen currency increases in value. No one knows beforehand! Further you need to understand that every currency exchange comes at a cost which reduce your return. So you should check the offered exchange rates closely. Mostly the offers from transferwise, currencyfair or revolut are very good and you save a lot of money by using them.
What happened during the last 10 years?
Throughout the last 10 years we saw many crisis (financial crisis, euro debt crisis etc). So there was a lot of movement between currencies. Ultimatively I am surprised how many more or less stable currency pair there were, even there were outliers. Above you see an illustration with the performances of seven currencies against the Euro over a timespan of 10 years (31.12.2007 bis 29.12.2017). Below if have added a table with the yearly returns.
You see for example if somebody had changed EUR to Swiss franc, he would have made more then 40 percent. Ok this example is extreme. Against the safe heaven CHF, most currencies had not the slightest chance. The illustrations though shows that there were extreme movements, but over the years it relativise most of the times..
A closer look
I start with the table above. An Euro investor would have made profit from investments in CHF, but lost money with GBP and Polnish Zloty investments. This means conversely that GBP Investors made money by investing in Euro, same is true for PLN investors. This statement is only true in this 10 year context, just to be clear. What is really important is that in my calculations I have not included any yields, only price changes. This means that if you had invested in p2p or elsewhere which returned some percent annualy, there would not be a loss in any currency. If we take a holding period of 10 years plus reinvestments (compound interest) into the calculation, the outcome would be even better. You see, there are only 2 outlier years which have a massive impact on the total return.
From the following four currencies only the investment in Georgian Lari returned negative. A special case demonstrates the Danish Krona as the Danish National Bank pegs the DKK to the EUR. There are only minimal yearly deviations.
Investments in foreign currencies can be beneficial, but are risky. If you cannot swallow fluctuations should stay in his base currency, there are engough investment possibilities. I will update the performances of the currencies quarterly. If you want me to add further currencies, let me know. Again: I have not included any yield figures in my calculations. This means, if one had invested for 10 years with a yearly return of 2.5 percent only, there would be profit in any currency pair. This is not investment advice, but only as basis for your decisions.
As announced before, here is the second part of my top 10 with ranks 6 to 10 (follow me to places 1 to 5). A reason for the splitting was that my first post was long (approximately 850 words) and I did not want to bore you with 1’700 words in one post.
Viainvest loses one rank and resides no in the bottom five. One reason for this move ist hat they lowered the interest rate on Spanish loans from 12 to 10 percent. I don’t know if this is just a test by Viainvest to see if these loans get sold at a lower rate or not. Or if they had more defaults then expected in that market and want to increase their margin (more defaults -> more capital needed)? This is just speculation. On the other hand my cash quota increased a little bit, which is not making me happy (but far from frustrated). At the end of the day Viainvest is a stable marketplace, with a solvent owner (Via SMS Group).
Irish marketplace Linked Finance climbs 3 places and ranks now at number 7. The Reasons: I am with the platform for more then one year now and did not have any defaults. Only one loan was delayed and on the first day of the delay I got a message from Linked Finance and they got in touch with the borrower. After some days the payment was received and the borrower respected the schedule. The Irish marketplaces seem to know their business (check out Flender for example). There are lots of new loans, but they get filled very quickly. You will need to configure an autoinvest. I am happy for Linked Finance that their business seems to grow.
French marketplace Lendix seems as well to have a good credit scoring system. I am with the platform for more then one year and I have not experienced any delay nor default. The support works outstanding. The interest rates were relatively low compared to the baltic marketplaces, from the beginning. In my opinion Lendix loans should better be compared to corporate bonds then Baltic Loan Originators. So with this point of view I don’t care about the lower rates (they are still very good). During the last weeks I noticed a drop in interest rates. Further two loans were paid back prematurely (at least I got 2% Bonus interest). I guess the borrowers found a cheaper source of funding. So I guess we won’t see any rise in interest rates in the coming months. For the first time I invested in a Spanish loan, hopefully I won’t regret this decision (according to stats there are no defaults from Spaniards during the first 7 months since launch).
My only platform from Down Under (are there even more?) makes me happy. Payday is on the firth of every month and no payment was missed so far. I doubled my holding there. Transferwise borderless account offers a personalized AUD account now. This makes transfers between accounts really easy. I already tested it (if you withdraw you have to fill out a kyc/aml procedure and give some informations plus utility bills etc (as with any other platform in the UK for example).
This special, from the handling point of view, platform performs very well. DoFinance informs me when loans get repaid and I can reinvest smoothly. There is not a lot say more at the moment. We need to see how this plays out, the loan originator and the marketplace itself are pretty young. Please remind yourself that if you cancel an investment before maturity, you can loose all interest accrued.
There are other platforms which I considered for the top 10. Flender for example, no payment delays etc, but the funding period is too long and only a little dealflow. If this will be better, then I guess Flender is a top 10 candidate. Peerberry as well would be a valid candidate, but the marketplace is too young at the moment for a serious consideration. Iuvo is not bad either, but not top 10 material at the moment.
That’s it for now, hopefully you found something interesting.
I have already written some stuff on Brickowner in the past. Brickowner got my attention on Seedrs, where they were raising funds. Meanwhile they successfully had two funding rounds in which I invested as well. So I am a (minor, 0.0001%) shareholder oft he marketplace. I tell you this for transparancy reasons. I will express my own opinion impartial.
What did Brickowner achieve so far?
Besides the two mentioned funding rounds there are already 4 projects financed, two are still funding at the moment, although one (Nash) will close imminently I guess. Yet 44 to 59 investors have participated in the projects and the investment sums were between GBP 35k and GBP 101k, relatively small. I already invested in some of those projects.
What’s the current project about?
The current project, Regent House, blasts the prior projects in terms of volume (1.7 Mio GBP) and expected yield (32.66%). The prior projects only filled very slowly, so how on earth shall such a big project be funded? I remind you that Brickowner does not originate the project itself, but works together with asset managers which want to open their projects to retail investors. This case is special as Brickowner provides its platform to a real estate developer and does the administrative task for him by handling the investments and client onboarding. This can increase growth drastically for Brickowner, if more such projects can be launched.
The project itself is a commercial property which will be converted into an apartment building (one to two bedrooms) with a retail space on the floor ground. The rebuild should take about 12 months. A part (1.7 Mio of 5.8 Mio GBP) is being financed through Brickowner.
What are the risks?
It should be clear that you don’t get 30% yield without risk in only 12 months (btw 3% comissions is deducted up front from your investment). Investors participate as equity investors through a SPV. So if there are problems, this will reduce the expected yield and it might turn in to a loss. There might be delays which means that your capital is bound for more than 12 months. A lot can go wrong (but it does not have to of course): Anticipated sales prices are too high, generally cool off of the property market etc.
As I see it, the rest of the needed capital is being raised with a senior bond which has a superior claim on the assets before the SPV investors are in the queue.
I have already invested in this project, knowing that I could lose money if all goes wrong. This has to be clear to everybody who considers to invest (and is applicable to investments in general). I don’t want to be a naysayer, but I find it crucial that the risks are understood (especially in this case). I believe in this project; this is why I put my money in there.
For new investors there is a cashback available. If you register through this link and invest at least GBP 1’000.- (does not matter if in one project or 10 different over time) you will get GBP 50 as a reward (I get a commission myself). If existing Brickowner investors ask themselves why they did not get a notice about this project from the platform. Easy answer: First the Brickowner people and involved parties will invest. Then it will be publicly announced. I like this mechanism as it builds trust (to me at least) if the people in charge are in the same boat with me (risking their own money).