Assetz Capital Review
Last Updated on 26th August 2020 by Mark
Review of Assetz Capital who (used to be) one of the shining stars of the P2P sector – Assetz Capital + ISA Review
My Lending Experiences & Actual Investment Returns Published Monthly Below.
What is Assetz Capital?
Assetz Capital is a medium to large size Peer to Peer lender. Offering returns, from 3.75% for instant access, auto-investment portfolios. To over 15% for manually selected investments.
Providing loans to property developers and small businesses throughout the UK. With asset security on loans as a big plus (most loans are secured by property).
Read on to learn about my personal lending experiences with Assetz Capital, as well as my investment strategy and long term view of the company.
My Experience So Far
Assetz Capital have been one of my biggest disappointments in the P2P lending sector. They were at one time the shining star of all the P2P platforms, touting the liquidity of their “Access Accounts” and the asset security. Unfortunately the pandemic has exposed some of the things they were most proud of, have become their Achilles heels. I have more capital stuck with Assets Capital now than any other lender (over £20k). Although the asset security is still a welcome fact, many investors who “thought” they had quick access thought the Access Accounts have now found out that this is not really the case. Liquidity has dried up so acessing capital now is not a quick event. Although the Assetz Capital team are trying to do their best to manage the business, they appear to be really struggling to keep it together. They have had to take a cut of the investors interest income and also lower the target rates of their Access Accounts in order to stay in business. Added to this, earlier in August Assetz launched a new capability to their “Access Accounts” which enables investors to offer a discount to prospective buyers if should they want to try and sell their loans faster. The problem here is that investors will buy discounted loans rather than loans at par, meaning that getting out quick now is almost impossible unless you offer a discount (currently running 8%-12% as I am typing this). I’m not going to go this route as (in theory) we should get our money back eventually as all loans are secured. And giving up £2k of my investment just to get out seems too much to take. I’ll keep an eye on the business and if I feel like the loss is worth it to recover my investment I may do it, but right now I think the money is relativity safe.
We as investors regularly get updates, and unfortunately they are not typically of a positive nature lately.
Here is the latest update basically saying that the provision fund will no longer be able to cover some of the loans in the Access Accounts, so they can no longer be sold, which means money is stuck until they can be sold or they repay:
My Assetz Capital Strategy.
I’ve decided to draw down from Assetz Capital as soon as I can retrieve my investment, which may take a LONG time if I don’t offer a discount. Even if they recover from the economic downturn caused by the virus (I do have my doubts), I’ll still exit the platform as their existing business model does not work (for the Access Accounts anyway), and I’m not convinced it will work in the future. To be fair, the staff at Assetz Capital have always been honest and professional and I believe they are trying to make the best of a very bad situation. I also have to admit, if they are still around when everything settles down, and they adjust their business model to compensate for drastic economic conditions, I would look at investing with them again.
Update – PSA & GBBA2 Accounts
In November 2019, Assetz Capital said they will no longer be allowing investment in their PSA (property Secured Account) or their GBBA2 (Great British Business Account Series 2). Current investors can remain invested if they want to.
This move actually makes a lot of sense from a business perspective now Assetz introduced their 90 Day Access Account. The PSA currently pays a rate of 5.50% and can take up to 5 years to exit. Whereas their new 90 Day Account pays 5.75% and offers access to capital in 90 days under normal market conditions. So it makes sense that a higher rate and better liquidity should win out. Also all Assetz Capital Loans now have asset security, so the PSA account no longer makes sense.
The GBBA2 account again has lower liquidity, and lending rates are falling across the whole credit industry, so the 6.25% may not be sustainable in the future. Thus it makes sense for Assetz to encourage investment in to their accounts with better liquidity moving forward even though the rates are a little less. The higher rates are still available in the MLA (Manual Lending Account) and Assetz have said they have no intention of changing that in the foreseeable future.
Personally I’ll be moving my PSA assets to the 90 Day Access account as soon as feasible, and then letting my GBBA2 account run down and reinvesting the capital in the 90 Day Access too.
Visit The Assetz Capital Website
The Obvious Investor – Easy-Info Table©
Overall Rating*: 
(2.8 / 5)
Who can invest: 
Loan Currencies: £
Estimated Return: 3.75% - 15.00% depending on account
My Actual Return
(Per Lender): 5.97%
My Calculated XIRR: 5.93%
Risk Rating*: 5/10 - Med
Deposit Funds: Bank Transfer.
Typically Available in 2 - 24 hours.
Early Exit: Yes, no cost under normal market conditions.
QAA account instant assess.
Other auto-invest accounts 30 days and 90 days notice.
Manual Lending - sell on secondary market.
Min. Investment: £1
Auto-Invest: Yes - 3 accounts
Manual Invest: Yes, higher returns but no provision fund.
Lending To: Borrowers
Loan Types: Various Business Loans.
Mostly Secured.
Default Rates: Expected 4.6% actual below 3%
Loans Amortize: Yes
Loan Security: Yes.
Most loans secured by property and/or
personal guarantees
Provision Fund: Yes.
On 3 auto-invest accounts, not on manual invest.
Time to Invest: Usually Quick.
Couple of days depending on loan availability
Time to Mange: None (auto-invest).
Depends on your research (manual)
Lender Fees: No
Payments Received: Monthly - Various times throughout the month.
Amount Lent: £800m+
Number of Investors: 34,000+
Loan/Dflt Stats: Yes, Click Here
Regulated: Yes: FCA
Location: Manchester, UK
Founded: 2013
Website: www.assetzcapital.co.uk
Email: [email protected]
Telephone: 0800 470 0430
IFISA/IRA**: Yes - IFISA - Click here for more info.
Cashback**: None Currently
How to Sign Up**: Sign Up Here!
Assetz Capital – Overview
History – Assetz Capital Review
Assetz Capital were launched in 2013 in the UK as the first secured Peer to Peer business lender. In the 6 or so years they have been in business, they have become one of the best known and trusted P2P Lenders.
Current figures suggest they have lent almost £800 million from 34,000 investors in the time they have been in business.
Expected default rates are 4.6%. Extremely low rates for Peer to Peer companies lending to small businesses. Obviously low because of the asset security most loans come with. Add that with the Assetz Capital Provision Fund and investors money is fairly well protected.
Assetz have an expected bad debt rate of 0.2% with an actual rate of 0.1%.
Regulation
Assetz are regulated by the UK’s Financial Conduct Authority (FCA) with full permissions under FCA number 724996. They gained FCA permissions in September, 2017.
It’s important to note that the FCA is not the same as the FSCS (Financial Services Compensation Scheme). So capital is not protected as it would be in a bank.
Assetz Capital Review
Signup Process
Opening an account with Assetz Capital is fairly easy. Just the usual ID checks.
If they can verify you though one of the UK’s credit agencies, you will be approved immediately. If not, you may need to send them a copy of your passport or driving license. And perhaps a utility bill or bank statement.
Residents of most countries can sign up, including USA residents (Assetz Capital ISA only UK). However you’ll need a UK bank account. See my TransferWise Borderless Account review for more information on how it may be possible to get UK banking details even if you’re not a UK resident.
Deposits & Withdrawals
Deposits and Withdrawals are made by bank transfer from a UK bank. No debit or credit card deposits are available.
Deposits usually show up in your account the same or the next working day. Withdrawals typically take 2 – 3- business days.
It is possible to make deposits directly in to the individual Assetz Capital lending account by using a special reference number supplied by them when you sign up.
Time to Become Invested
It can take a few days to get capital distributed when in any of the auto-invest accounts (except the QAA which lends out the funds fairly quickly).
I’ve found investment time varies based on the amount of capital I am investing, as well as the Assetz Capital’s loan book at the time.
On the MLA (Manual Lending Account) it entirely depends on how long it takes to research the loans, and how much diversification you want.
As you can see by the screenshot below, it’s easy to see how much money in each account is waiting for investment.
Who are we lending to?
Assetz Capital is a true Peer to Peer Lender where lenders are lending directly to borrowers who are typically small to medium size British businesses. Loan agreements are between the lender and the borrower.
Assetz Capital Review
Loan Security
All of Assetz Capital’s loans are secured by property, business assets or personal guarantees from company directors.
Assetz Capital’s website always gives good information on asset security. It lists all items on the loan page, and if you hover over the item, it gives further detail.
Default Rates
Assetz Capital has an expected lifetime default rate of 4.5% with an actual rate of below 0.5%.
Non recoverable bad debt rate is what is really impressive though, at an expected 0.1% with an actual rate of 0.0% for the last 2 years, meaning that so far they have been able to recover almost all of the lent capital. You can see current statistics here.
Amortization
Most of Assetz Capital’s loans amortize, meaning you receive capital and interest payments every month.
When loans amortize, it reduces loan risk compared to a non-amortizing loan, in which nothing is received until the end of the loan period, or only interest is received monthly and then the capital repaid at the end of the loan period.
Amortization is the paying off of debt with a fixed repayment schedule in regular installments over time. It is an accounting technique used to lower the cost value of a finite life or intangible asset incrementally through scheduled charges to income.
It’s easy to see if loans amortize and when loan payments have been made (when both interest and principle are paid). And when payments are due by drilling down in any loan listing.
Selling Loans and Withdrawing Capital – Assetz Capital Review
Assetz Capital don’t charge an exit fee for selling loans.
With the QAA under “normal market conditions”, capital can be withdrawn from loans almost immediately, providing there is enough other lenders capital in the account to cover your loans (typically not a problem).
In the other auto-invest accounts, you will need to give either 30 or 90 days notice to withdraw funds depending on which account.
The MLA is hard to gauge. Exit time can vary as loans can only be sold to other investors. Meaning if and when another investor chooses to purchase the loans.
Here you can see the invested capital in the QAA. Withdrawing shouldn’t be a problem here as of the time of this screenshot.
Diversification
Assetz Capital takes care of diversifying loans in the auto-invest account. It is mostly good, however I have seen instances where it is possible to get a big chunk of capital in to a single loan.
In theory large loan chunks shouldn’t matter because of the Assetz Capital Provision Fund, however the fund is discretionary (meaning they don’t have to use it), and if it runs out, there could be a big chunk of capital go bad (default). This also applies to the Assetz Capital ISA account.
This doesn’t worry me too much because the loans are asset secured with good LTV’s. So, even if the loans were to go bad, I would more than likely be able to retrieve my capital.
If you get auto-invested into a loan with too much capital, you can always sell the loan on and diversify manually if you’re not comfortable with it.
Provision Fund
Assetz Capital’s provision fund covers their auto-invest accounts including capital invested in the Assetz Capital ISA. It aims to cover up to 5% of interest and capital repayments from bad debt.
Under normal market conditions, this should cover any bad debt just fine, allowing the account to provide the indicated return rates.
The provision fund is discretionary with Assetz Capital though, meaning they don’t “have” to use it if they don’t think it is necessary. Although in my experience it hasn’t been a problem. The fund has always paid when needed. See their T’s & C’s For more information on Assetz Capital’s provision Fund.
Tax Free IFISA Account – Assetz Capital ISA
The Assetz Capital IFISA (Innovative Finance ISA) was launched in December 2017 for UK residents enabling potential tax free investments for Peer to Peer lenders. Read more about IFISA’s here.
Investment Accounts – Assetz Capital Review
Assetz Capital now has 4 different investment accounts. There used to be 6 accounts, however the GBBA (Great British Business Account) and the PSA (Property Secured Account) stopped accepting investment on the 13th of November 2019. This move actually made a lot of sense from a business perspective. The PSA was paying a rate of 5.50% and could take up to 5 years to exit. Whereas Assetz 90 Day Account pays 5.75% and offers access to capital in 90 days under normal market conditions. So it makes sense that a higher rate and better liquidity should win out. Also all Assetz Capital Loans now have asset security, so the PSA account no longer made sense.
The GBBA2 account again had lower liquidity, and lending rates were falling across the whole credit industry, so the 6.25% may not have been sustainable long term. Thus it made sense for Assetz to encourage investment into their accounts with better liquidity moving forward, even though the rates are a little less. The higher rates are still available in the MLA (Manual Lending Account) if that’s what you’re looking for, and Assetz have said they have no intention of changing that in the foreseeable future.
At the top of the accounts page on their website is displayed your average combined interest rates between all 4 accounts.
Quick Access Account (QAA)
The QAA is a really great option. It offers instant access to funds contained within, similar to an easy-access bank account under normal market conditions. I have to say out of all the P2P lenders, the QAA sets Assetz Capital above the other options out there because it pays a good return.
Other companies like RateSetter (Rolling Rate Account) have quick access accounts, but they don’t typically pay as much interest.
The other great thing about the QAA, when waiting to invest in the auto-lend accounts, money can be placed here to earn 4.10%. This greatly minimizes cash drag on the other accounts.
Loan repayments from other accounts can also be swept here for the same reason.
30 Day Access Account
Offers a little less percentage yield than the 90 Day Access Account at 5.10%. However under normal market conditions, Assetz Capital say you can make withdrawals with 30 days notice.
90 Day Access Account
Offers a little more percentage yield than the 30 day account at 5.75%. Under normal market conditions, Assetz Capital say you can make withdrawals with 90 days notice.
Manual Lending Account (MLA)
With the MLA there are currently rates up to 15.00% available, however it takes time to invest and you need a little more experience with lending to know how creditworthy a company might be, and how good the asset security is.
So if you’re not really interested in learning the ins and out of business credit, perhaps the auto-invest account are best.
There is no provision fund on the MLA, so we are subject to direct defaults on this account. However if you choose loans with a good Loan to Value (LTV), you should be able to recoup most of your money eventually in the event of a default.
Website – Assetz Capital Review
The loan listing page shows good initial detail on the loan and also LTV’s for each loan.
If you drill down a bit further, you get even more details on each of the loans individually.
Should you choose to use the Manual Lending Account, please remember the “Prime Directive” and be sure to diversify accordingly as there is no provision fund. Personally I don’t like having more than 0.5% of my portfolio to any single loan, but providing the loan has a good LTV, I would go a little more with Assetz Capital as they have an excellent record of recovery and very low default rates.
Summary
Assetz Capital is one of my favorite peer to peer lenders for good reason. Their website is great, as are their returns for secured property loans. I only invest in their auto-invest portfolios which require zero management time after investment. The Assetz Capital ISA is another benefit for UK based investors if you’re looking for potential tax free returns.
I trust Assetz Capital with my money and I have no hesitation recommending them to other investors.
Thumbs Up Points for Assetz Capital
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Safety – medium size company with a good track record and makes preservation of your capital one of their top objectives. Most loans are property secured. If you want to ensure they are, you can just invest in the Property Secured Account for a nice 5.50% rate.
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Auto-Invest – in all but one portfolio means virtually no time managing investments. Just send your money over and decide which portfolio you would like to invest in. Repayments can be reinvested automatically for hands off investing.
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Great Rates – for a property secured auto-invest account, Assetz Capital interest rates are among the best in the business.
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Website – the Assets Capital website is very comprehensive, but also very easy to use and understand once you get the hang of it. It can take a while to learn, it but once you get to know the interface it works well.
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Large Investments–although Assetz Capital’s loan book is not as big as Funding Circles, they still manage to gobble up large investments. You just need to keep an eye on the loans in the auto-invest, to make sure they are distributing the money as diversified as possible so you don’t get too much in a single loan.
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No minimum investment – if your portfolio is still small, it’s still easy to invest with Assetz Capital. They have even put me in to loan parts of just 0.01p.
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Quick Access Account (QAA) – is great for getting a good interest rate, especially for almost instantly accessible funds under normal market conditions.
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Zero cost exit –Assetz Capital doesn’t charge any points for exiting your investment early (providing there are buyers available to buy your loan parts). It is very easy to exit the QAA but it can take longer on the other accounts depending on how many buyers there are available.
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Provision Fund – in the auto-invest account the fund should pay out on any defaults, although Assetz Capital does say that the fund is “discretionary” so it’s good to keep that in mind.
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Financial Conduct Authority (FCA) Regulated.
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Assetz Capital ISA – available for UK investors – Assetz Capital ISA
Thumbs Down Points for Assetz Capital
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Initial Investment Time – investment can take a little bit of time initially because of the popularity of Assetz Capital. And the sheer number of investors trying to get in. The QAA account makes up for it though, because your money will sit there earning 4.10% interest from day one while it’s waiting to be invested in the longer term portfolios.
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Large Loan Chunks – keep an eye on the loans you get invested in through the auto-lend if you have a sizable account, as they seem to be lacking a bit of diversification when the account gets bigger.
Visit The Assetz Capital Website
Risk Factor – 3/10 – Low
Is Assetz Capital Safe? How Secure is Assetz Capital? I consider Assetz Capital to be at the lower end of the risk scale.
Considering Assetz Capital loans are secured, it’s hard not to give them a lower risk rating. However they are lending to businesses, which are inherently more risky then lending to individuals, and their diversification is not always my favorite. I like Assets Capital a lot however and put a lot of trust in them. They are one of my largest lender accounts.
As you can see by the TrustPilot Assetz reviews above, many other people like them too, both investors and borrowers alike.
Who Can Invest with Assetz Capital
Residents of most countries, who have a U.K. bank account (see TransferWise Borderless Account) who can pass the ID checks can invest with Assetz Capital. Contact Assetz Capital for further information.
Assetz Capital Review – Offers & Signup Links
Assetz Capital are offering investors 1% cashback on all new investments made between 6th March 2020 and 11:59:59pm on 5th April 2020 – both existing and new investors are eligible for this promotion.
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