Abundance Investment – an impact investment platform
If saving the planet is part of your priorities, Abundance Investment helps you do this and also gives you a nice profit.
Abundance Investment is a UK based investment platform opened in 2012. It offers green investments, mainly renewable projects in the UK, that contribute to a better world. So far, they managed to fund 40 projects worth 100 million GBP.
The platform lets investors buy debentures (unsecured bonds) and receive shares of the profits from the sale of green energy along with repayment of their initial investment. Currently, there are around 6000 investors on the platform.
Most of the investments are long-term, 15 to 20 years, although in recent years some short-term loan projects (2-3 years) were added as well. Most likely these will be refinanced at some point with long-term debentures.
- Launched: 2012
- Headquarters: UK
- Loan types: Green Energy, Social Housing
- Loans from: UK
- Loan terms: 2 to 20 years
- Interest rates: 5% – 12%
- Loans funded: 101 million GBP (as of January 2020)
- Investors: 6000 (as of January 2020)
- Fees: no fees
- Minimum investment: 50 GBP
- Currency: GBP
- Secondary market: yes
- Auto-invest: no
- Buyback guarantee: no
- Accepts investor countries: UK, EEA and Switzerland
- Authorized: yes, by FCA
- Started investing: January 2019
- Current value: 302 GBP
- Earnings: 2 GBP (I’m getting more payments this December and February next year)
- Updated: December 2019
I’ve come to like the concept of socially responsible investing so from now on I’ll add a part of my funds to this platform.
My portfolio contains for now:
- one 10% interest investment in CoGen Limited, a waste gasification facilities developer from the UK.
- one 7% interest affordable housing project in Liverpool
- another 6% interest community housing project in Liverpool
- an 8% interest in Atlantis Future Energy, for a tidal energy power plant building
Interest is paid either quarterly or twice a year, so my returns are not that great right now. It also takes a few months for projects to get funded, and this is not ideal.
My main drive for investing with Abundance is not profit, but being part in something that benefits the environment. Of course, profit expectations are still there, but they’re on a second place.
Opening an account
Only the UK, EEA and Switzerland residents can invest with Abundance Investment. The process is simple and it takes less than 5 minutes. You can deposit money either by debit card or bank transfer.
Up until a few months ago, all the projects were green energy-related. Now Abundance started to add also social housing projects, in which I’m happy to invest. On the details page, more information about the project is presented, along with a payment plan, financial statements and detailed risks.
You can buy investments from other investors. Or, if for any reason you wish to free up your capital, you can also sell your investments here. The offers from different investors are grouped by project, and you can select the offer that suits you best (cheapest).
The user dashboard
I like the website’s user dashboard. It’s clean and contains detailed information about current investments, payment calendar and latest news related to your investments.
Summary of Abundance Investment
I like the idea of ethical investing and supporting companies that promote a greener economy. For this, I’m willing to ignore some of the platform’s shortcomings.
On the one hand, there are lots of good things happening on the platform.
The website is very nicely designed and it’s fast. You can see someone put a lot of love in designing it.
The projects available are all the needed info to decide if you want to invest in them or not. Each project has an offer document describing the use of funds, the business plan, potential risks, market conditions, all spread usually across a 50 pages document. Compared to most of the p2p lending platforms I’m invested in, the documentation available on Abundance is very refreshing.
On the other hand, there are also things that don’t really work here.
The projects get funded very slow. While the ethical investments trend is on the rise, there’s still not enough momentum to fund fast enough the projects available. On their defence, some of the projects like the Atlantis Future Energy tidal power plant are looking for 7 million GBP in funding, so that takes a while to fund.
The risks involved are also high for the expected returns, especially if you’re not a UK resident and you don’t benefit from any tax advantages by investing in these projects.
These being said, I think Abundance is doing a great job and while I’m not investing a big part of my funds here, I always keep an eye on new projects available and invest a small token in them. As a small sign of appreciation for what they’re doing for the planet.