Assetz Capital to run off retail loan book
Assetz Capital will run off its retail investment loan book over the next five years, as it pivots to becoming an institutional-only platform.
The peer-to-peer lending platform said that the decision was made following the rapid rise in the base rate and corresponding increases in bank savings rates. Earlier today, the Bank of England announced another 0.5 per cent increase in the base rate, to 3.5 per cent.
Assetz Capital had been offering returns of approximately four per cent via its easy-access auto-investment accounts. Earlier this year, the platform increased the rates on its access accounts in response to rising interest rates. However, two weeks ago Assetz opted to restrict withdrawals from these retail accounts, citing a lack of new investment.
Meanwhile, over the past few years Assetz has been building up a network of institutional investors. Since 2020, 80 per cent of all Assetz Capital’s lending has been provided via institutional capital.
“We are incredibly proud of what we have achieved in partnership with our retail investors,” said Stuart Law (pictured), chief executive of Assetz Capital.
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“Assetz Capital provided significant returns for investors over a decade where interest rates languished at nearly zero per cent. At the same time, our partnership with our retail investors has been critical in pushing us to our first billion in lending, and in the process delivering £1.5bn of desperately needed new housing, while supporting countless small- and medium-sized enterprises who have been unable to secure finance through traditional sources, like major banks, the public sector or other institutions.
“Given market conditions, retail investors now have more choice over bank savings products than at any time in the last decade and this has reduced their investment appetite as a result.
“We have therefore taken the decision to make permanent the temporary pausing of new lending through retail investor capital.
“We understand this might be frustrating for some retail investors and we will do all we can to support them, provide timely and clear information, and facilitate their withdrawals as quickly as possible.”
Assetz added that the closure of the retail platform will not impact any current lending, all of which will be fulfilled as expected for borrowers.
The platform made the decision to stop retail lending after consulting directly with its investor base and determining that there was insufficient demand from retail investors for these services.
Read more: Assetz chief: Institutions will drive us towards £2bn of lending