May 2020 portfolio updates – stagnation

May has been a month of stagnation for my p2p lending portfolio. While I didn’t add new funds, I’ve moved part of my portfolio to safer platforms like EstateGuru, Neo Finance, Investly, and Flender.

Things seem to get stable in the p2p lending space. Investors stopped leaving platforms, and while money is not pouring in as before, investments are starting to slowly grow.

Most of the European economies are opened now, and the number of coronavirus cases started to drop, however, investors are still cautious.

P2p portfolio updates

Numbers

  • May earnings: 183 EUR
  • Total earnings: 2447 EUR
  • Portfolio value: 25,240 EUR
  • April portfolio value: 24984 EUR
  • New deposits: 76 EUR

Changes

  • Deposits: EstateGuru (250 EUR), Neo Finance (200 EUR), Investly (200 EUR), Flender (100 EUR)
  • Withdrawals: Fast Invest (295 EUR), Viventor (230 EUR), TFG Crowd (120 EUR), PeerBerry (29 EUR)

Labels

  • High performers: Mintos, EstateGuru, Neo Finance, Investly, TFG Crowd, Viventor
  • Low performers: Flender, Crowdestate, Debitum Network
  • Troubled: Grupeer, Monethera, Wisefund, Crowdestor, Fast Invest
  • Exiting: PeerBerry, Bondster, Bulkestate
  • Impact investments fund: Trine, Lendahand, Abundance

High performers

I’ve included here the platforms that still offer steady returns, and seem to be affected less by the coronavirus crisis. It doesn’t mean they don’t have problems at all.

Mintos has the largest stake in my portfolio, and I can’t complain about the steady returns for the past 2 years. However, it currently has a few problems it needs to work on:

  • debt recovery from the high number of defaulted loan originators is ongoing, and Mintos published its latest updates here
  • “pending payments” turns out to be just another loophole, like the “grace period”, for loan originators to delay payments to investors
  • no minimum loan term is set for loan originators; some of the loans I’ve invested in were bought back even after only 7 days, just to be published again on the primary market with lower interest rates
  • Mintos’s loan portfolio is still in freefall, 20% smaller than what it was in February; it seems investors don’t trust enough Mintos to return with their funds on the platform

EstateGuru is performing as expected, and the funding seems to recover. In May, it managed to fund loans worth 4.7 million EUR, a 0.6 million EUR increase since April, but still half of its all-time high in January. I found this interesting article on its blog, regarding debt recovery statistics. It’s good to see EstateGuru puts a lot of effort into protecting investors’ funds, and it’s also good to see it actually succeeds in doing so.

Neo Finance seems to have overcome the crisis and went back to pre-crisis funding numbers. In May, it managed to fund loans worth 1.5 million EUR, a bit far from their 5 million EUR goal for 2020.

Investly is doing well enough that the interest rates on invoices started to drop to pre-crisis levels. I’m happy with the returns here, and I’ll keep adding funds in the following months.

While I’ve been withdrawing funds from TFG Crowd, I cannot notice its doing well, even in the current crisis. Besides a few delays, all payments came in time, and withdrawals still take only a few hours to complete. It added invoice financing in their loan offer, which could make TFG Crowd more interesting in the future.

I’ve done a test fund withdrawal from Viventor, and it took a day for the funds to reach my account. Overall, the platform is not doing great. In May, it managed to fund loans worth 0.5 million EUR, a far cry from the pre-crisis levels of 5 million EUR. I think its biggest problem is the “pending payments” idea they took from Mintos, with the same disastrous effects on its loan portfolio. Viventor is trying to mitigate this, as with their latest long webinar on pending payments.

Low performers

My Flender portfolio has been heavily affected by the coronavirus crisis. Half of the loans in my portfolio have payment breaks, some of them until July, other until September. These loans have a short notice next to them, saying:

Following communication with the borrower and a review of the financial information provided, it is clear that the trading and financial positions of this business have been seriously impacted by the Covid-19 outbreak. Flender has granted the borrower a payment break to allow the business time to recover. The payment schedule reflects the new repayment structure and should continue as normal after this period.

Debitum Network doesn’t seem too affected by the crisis, but the interest rates are some of the lowest in the Baltics p2p lending space. While my portfolio here performs as expected, with no delayed payments, it’s still a low performer due to the inherent nature of the platform.

Crowdestate is one of the small disappointments in my portfolio. Not because 3 of my loans are in default, as defaults do happen, but because of Crowdestate’s slow response to borrowers problems. I might decide in the near future that EstateGuru is enough for these types of investments, and drop Crowdestate from my portfolio.

Troubled platforms

I’ve included here p2p platforms that either stopped paying any dividends, either stopped their activity during coronavirus crisis.

Grupeer is top of the list as I have most investments here and it was also hit the most by the crisis. Its accounts are frozen, employees fired, and investors trust lost. Grupeer managed this month to restore investors’ balances to their true numbers, canceling withdrawals requests, and updating the balance with interest payments received in March. It still has a long way to go until it’ll be operational again if it will manage to do that.

Wisefund has also run into problems, with borrowers unable to pay in the past months. It was also unable to attract new investor funds for the past 3 months. While it definitely has problems, I like its approach to open communication, and its honesty when talking about the platform problems. In a recent post on its blog, it talks about its buyback fund and why it’s not available anymore:

Before January, there was an agreement with our partner to cover early exit requests up to 250,000 EUR, as well as cover defaults if such accrue in the same amount. After January 21st, 2020 when multiple Baltic crowdfunding platforms stopped their operations leaving investors leaving confusion and uncertainty among investors trusting their funds with those platforms, Wisefund received “panic” requests for early exit quickly exceeding the amount of 250,000 EUR. While many recalled their requests, those which left were all respected and paid out in full amount as promised.

Unfortunately, for fee-based early exit option there are no further arrangements and it stays disabled as there is no possibility to increase the guarantee agreement limit at this stage.

Fast Invest starts to worry me, especially because of its lack of transparency. I can assume it has cash flow issues, and this is why withdrawals take a lot longer than normal. Instead, Fast Invest just says it takes a long time to process withdrawal requests, which is hard to believe. It started offering investors a 9% interest on delayed payouts, hoping investors would stop complaining about how long it takes to withdraw funds. Instead, it makes me believe the funds available in my account are actively used by Fast Invest to finance loans, and those funds are not actually available in my account.

Platforms I’m exiting from

I’ve included here PeerBerry, Bondster and Bulkestate. They are performing well, although each one of them has minuses that make me leave them

PeerBerry is doing really good even in crisis times and it managed to fund loans worth 10 million EUR in May. I don’t like their focus on payday loans, and 96% of the available loans on the platform are just that, leaving little room for other types of investments. I’m currently invested in some car loans and real estate loans, and it will take a while until I’m out of PeerBerry, but all I can do is wait.

Bondster is not bad, but it’s just too small to keep investing in it. It’s primarily targeted to Czech investors, and it’s annoying to have to switch to English each time I access the platform. While the returns are not bad, I won’t keep investing here.

Bulkestate is just too small to keep investing here. I like the projects published here, the constant updates the Bulkestate team is sending on each project, but the number of opportunities available is just too small to keep trying to invest here.

Impact investment fund

I haven’t added any new funds to Trine, Lendahand, or Abundance Investments since I haven’t added any new funds to my p2p portfolio.

Last month I’ve received my first interest payments from Trine, the first 5 EUR earnings on this platform. I like that Trine is sending regular updates on what it’s doing to manage the current crisis. Things are going well currently, and I hope it will still send the same updates if things start to go bad.

Real estate portfolio updates

Numbers

  • Invested: 5370 EUR
  • Current value: 5210 EUR
  • Total earnings: -160 EUR

Platforms

  • Spain: Brickstarter (704 EUR), Housers (698 EUR), Inveslar (200 EUR)
  • Estonia: Reinvest24 (413 EUR)
  • UK: Brickowner (406 GBP), British Pearl (929 GBP), Property Partner (675 GBP), Yielders (828 GBP)

Spanish platforms

Brickstarter had a rough year, as its business model is focused on Airbnb properties. As travel starts again in Europe, I’m expecting Brickstarter will recover and publish new projects on its platform.

Housers is turning into a big disappointment. Its platform is one of the safest I’m invested in, yet the returns are so low it’s hard to find a reason for investing. I’m not the only one thinking of it, as even though Housers boasts it has 120,000 registered users, only 1 million EUR was invested in its platform in the past month. Even PR initiatives launched by Housers, like donation campaigns for Covid-19 vaccines don’t get traction. This specific campaign managed to attract less than 2000 EUR in donations, less than the cost of the building of that website.

Inveslar is a longer play, I’ve only recently started investing with them, and I’m waiting for more buy-to-sell properties to be published on its platform.

Estonian platforms

I’ve only been involved with Reinvest24 for the past 18 months, and while the returns are not too bad, I’m considering withdrawing my funds. The platform is just too small and in the past 2 years, it didn’t get enough traction to justify any further involvement with them. I’m still invested in 3 properties that would drag on for a while, but these would be my last investments here.

UK platforms

The UK real estate market is in free fall, and this is also visible in my investments here.

The only UK platform still performing, although with reduced rental dividends, is Yielders.

British Pearl decided in April to sell all its portfolio, although it’s still looking for buyers. No rental dividends meanwhile, and the valuation of the properties I’m invested in already dropped 25% this year.

Property Partner decided to postpone rental dividends for another 3 months, until the end of September.

Brickowner is still going nowhere and hasn’t grown too much since I started investing with them 18 months ago. It’s currently running a crowdfunding campaign on Seedrs. Even though I already own some equity, I decided to skip this round and invest in other opportunities.

Equity crowdfunding updates

Numbers

  • Crowdcube investments: 4154 GBP
  • Seedrs investments: 7925 EUR
  • Funderbeam investments: 197 EUR

Changes

  • Crowdcube: 300 GBP invested last month in Freetrade (200 GBP), DroneAg (50 GBP) and Gravitricity (50 GBP)
  • Seedrs: 600 EUR invested last month in Lendahand (200 EUR), Riversimple (100 GBP), Eversend (100 EUR), Strowz (200 GBP)

I wasn’t planning to increase my startups portfolio, but there were a few opportunities I couldn’t stay away from.

Freetrade promises to become one of the most popular social trading platforms in Europe. It has a great community, great customer care, and offers zero-costs trades. It will take a few years until it will be available in Romania, but this doesn’t stop me from recognizing its potential. It’s their second crowdfunding round I’ve invested in, although last year I’ve only invested 50 GBP in them.

Lendahand is a platform I’m also invested in, in my impact investments fund. Its growth is slow, as it’s focused more on socially responsible investments than in high profits, but I like their approach and I was willing to invest part of my funds in them.

Strowz is a managed investment fund/ savings account I first heard about a year ago. In their last year’s crowdfunding campaign on Crowdcube, I’ve only invested 30 GBP out of curiosity and then tested their platform. This time around I’m willing to invest a bit more with them, as they show great promise. They recently opened a 2% savings account, built a completely new mobile app, and they’re planning to launch in the US and Canada this autumn.

Since I started testing their platform, my investment account on Strowz increased to about 1000 GBP (they only have GBP accounts atm). The performance wasn’t that great, at around 10% per year, but I liked how the portfolio behaved during February this year when it only dropped around 2%.

Corporate bonds – WiseAlpha

Numbers

  • GBP account value: 3045 GBP
  • Gain/loss: 444 GBP
  • Interest earned: 204 GBP
  • Current yield: 8.3%
  • YTM: 14.4%
  • EUR account value: 931 EUR
  • Gain/loss: -331 EUR
  • Interest earned: 46 EUR
  • Current yield: 15%
  • YTM: 44.1%

Details

  • I’ve only added 100 EUR and 100 GBP to my WiseAlpha portfolio in May
  • Corporate bond prices are still low, the average price in my portfolio being 82 GBP (price per 100 GBP)
  • The average price in my EUR account is even lower, at 69 EUR per 100 EUR
  • The worst performers in my GBP account are two bonds from Yell and Metro Bank, trading at 42 and 47 per 100 GBP
  • The worst performer in my EUR portfolio is a Travelex bond, trading at 29 EUR per 100 EUR and also missed its interest payments last month

I’m not too worried about the recent bond price drops. Unless the economy drops even more, it’s very likely the bond prices would go back to normal. If not, I’ll just wait for them to mature.

The most troublesome bond in my portfolio is 350 EUR worth of Travelex bonds that are now suspended because they failed to make their payments last month. Meanwhile, Travelex is looking for somebody to buy them, as a solution to their current cash flow situation. It’s been a bad year for Travelex, starting with their accounts hacked, and then with the entire global travel industry locked down.

You can read more about WiseAlpha here, in a review I wrote a few months back.


That’s all for now.