Welcome

The Maseco Asset Management Limited website is intended for use only by knowledgeable and experienced investors who meet certain criteria.

Maseco Asset Management Limited (MAM), a limited company incorporated in the British Virgin Islands under number 1893498, approved as an investment manager by the British Virgin Islands Financial Services Commission.  Certificate No. IBR/AIM/16/0132.

A “knowledgeable and experienced” investor could be an institutional investor, a professional investor or in the case of a retail investor an investor with sufficient knowledge and investment experience.

UK Resident Investors – Certified High Net-worth Investor Statement

You have throughout the financial year immediately preceding the date below had an annual income of £100,000 or more or held throughout the financial year immediately preceding the date below, net assets to the value of £250,000 or more.

Net assets for these purposes do not include the property which is your primary residence or any money raised through a loan secured on that property; any rights of yours under a qualifying contract of insurance; or any benefits (in the form of pensions or otherwise) which are payable on the termination of your service or on your death or retirement and to which you (or your dependants are), or may be, entitled.

You accept that the investments to which the promotions will relate may expose you to a significant risk of losing all of the money or other property invested.  That you are aware that it is open to you to seek advice from an authorised person who specialises in advising on non-mainstream pooled investments.






US Resident Investor – Accredited Investor Statement

As a US citizen you are an Accredited Investor as one of the following applies, you either have individual Income in excess of $200,000 in each of the last two calendar years or joint Income with a spouse in excess of $300,000 in each of the last two calendar years and reasonably expects to attain levels of Income this year at least equal to these amounts.[1] Or you have, and at the time of any purchase of securities of the Investment will have, an individual Net Worth, or the spouse and the investor currently has, and at the time of any purchase of securities of the Investment will have, a combined Net Worth in excess of $1,000,000.[2]

You accept that the investments to which the promotions will relate may expose you to a significant risk of losing all of the money or other property invested.  You are aware that it is open to you to seek independent advice.

Risk Warning

You should refer to the Prospectus, an Adviser and a Tax Specialist in each case before making any decision to invest in either of MAM’s Alternative Credit Funds.

Past performance is not an indicator of future results.  Currency fluctuations may increase or decrease the returns of any investment.  The value of investments can fall as well as rise; you may not get back what you invest.  The funds have limited liquidity and so you should expect not always to receive back your capital in a timely manner, during this time the fund value may fall as well as rise.

Acceptance

By accepting these statements you confirm you have read, understood and you meet the conditions of the relevant category of investor.

1 Income means adjusted gross income, as reported for federal income tax purposes, increased by the following amounts: (i) the amount of any tax exempt interest income received; (ii) the amount of losses claimed as a limited partner in a limited partnership; (iii) any deduction claimed for depletion; (iv) amounts contributed to an IRA or Keogh retirement plan; (v) alimony paid; and (vi) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code.

2 Net Worth is the amount by which your total assets at fair market value exceed your total liabilities, with the following adjustments:

(i) the estimated fair market value of your primary residence is excluded from your total assets; (ii) the amount of any indebtedness secured by your primary residence up to the fair market value of such residence is not treated as a liability; (iii) the amount of any indebtedness secured by your primary residence that exceeds the fair market value of your primary residence is treated as a liability; and (iv) the amount of any debt secured by your primary residence incurred during the 60 days immediately preceding your purchase of any securities of the Company is treated as a liability (even if the estimated fair market value of your primary residence exceeds the aggregate amount of indebtedness secured by such primary residence), unless such debt resulted from the purchase of your primary residence during such 60 day period.

Daniel Lanyon
Daniel Lanyon
Daniel Lanyon is Editor of AltFi Investor, extensively covering professional investment in the alternative finance space. He was formerly a senior and award winning journalist at FE Trustnet covering the world of financial markets and asset management. Having attained a degree in economics, he went on to work as a journalist at several of the world’s leading media organisations including The Times, BBC and Reuters covering economics, business and politics.

daniel@altfi.com

Back to opinions
June 4, 2016
Daniel Lanyon

Comparing the Big Three – What effect is institutional involvement having on Gross Lending rates?

In a recent article titled ‘a dive into the Loan Books of Zopa, Funding Circle and RateSetter’ it was highlighted that one of the factors affecting the changing nature of the loan books of the big three has been the introduction of institutional capital. Since the arrival of P2PGI in May 2014 whole loans and loans not protected by a provision fund have both become features of the aggregate UK lending portfolio represented by the LARI.  Both of these loan types are clear signs of institutional activity – it is exclusively non-retail buyers that take whole loans and it is only institutional buyers able to opt not to take provision fund protection.

One trend that we identified in our previous article and that seems likely to be a function of increased institutional involvement is the evolving level and dispersion of lending rates at each of these platforms. In this article we investigate the quantum and distribution of weighted average lender rates further by splitting loans into retail and institutionally funded loans. For Funding Circle this involved splitting the loan book into whole loans and fractional loans and for Zopa and RateSetter this involved identifying loans not covered by a contingency fund.

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The weighted average lender rate for retail investors has remained relatively stable at around 4.5%-5%. In stark contrast the loans that are not covered by Zopa’s contingency fund have fluctuated considerably and generally gone through at much higher levels. In fact, since June, institutional loans have ranged at an average of between 7% and 17% – consistently above average and in some cases considerably so.  The standard deviation of these rates has also been very high.  Since September 2014, the dispersion on a monthly basis is as much as 2-4 times greater than that of loans financed by retail investors. It is clear that the advent of institutional capital has opened Zopa’s market to some higher credit risk borrowers.  The dispersion of institutional lender rates falls broadly in line with the investment objective of investment trusts such as P2PGI who are targeting higher annualized returns than the industry benchmark (which is illustrated by the Liberum AltFi Returns Index).

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The weighted average lender rates (retail and institutional) follow a similar trend at RateSetter.  Weighted average institutional lender rates i.e. loans that are not covered by RateSetter’s Provision Fund are, in general, significantly higher and have varied more relative to retail lender rates. As with Zopa there is a notably wider dispersion in institutional lender rates, almost 2.3-3 times greater than the variation in retail lender rates and it is also notable just how much higher the rates are – averaging over 20% versus closer to 5% for retail customers.  Again – the arrival of institutional capital seems to have allowed RateSetter to explore some much higher risk lending.  (It is worth remembering, however, that non-provision fund covered loans make up a much smaller proportion of RateSetter’s loanbook than they do Zopa’s.)

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In contrast the weighted average lender rates for retail and institutional investors on Funding Circle have remained remarkably similar both fluctuating in the 8-9% range. The dispersion of lender rates is also commensurately narrow.  This is striking – the disparity in rates seen at the other platforms has not occurred here as institutional and retail capital both seem to be funding the same, or at least very similar, loans.

In conclusion it seems that Zopa and RateSetter have used institutional capital to grow into new areas of borrowing, and into what one would assume to be notably higher risk areas.  Funding Circle on the other hand has used the new influx of capital simply as extra liquidity that co-exists alongside existing retail participation.  These observations have some interesting implications.  Firstly we should recognize what institutional capital has likely done for loan origination at the consumer platforms.  It looks like loan origination should now accelerate as new borrower markets are being accessed.  This is however not the case at Funding Circle where the new capital is simply extra liquidity to provide supplementary capital to the existing loan origination pipeline.   Secondly it is interesting to note that whilst Funding Circle is a platform in which retail and institutional co-exist at the big consumer platforms institutional capital has heralded the arrival of a parallel market in which higher risk and return lending is engaged in by capital with a higher appetite.  It will be interesting to see how this evolves – it could be that some of the retail lenders on the big consumer platforms might also fancy playing in the higher risk/return areas (if they’re allowed…).