"It is good that people now have another way to withdraw capital from their loan investments and we expect discounts to remain for a while whilst the impact of the virus on the UK economy remains uncertain"
The new Access Account Marketplace from Assetz Capital has processed around 4,000 trades totalling around £6 million in its first two weeks.
Buyers took advantage of discounts on offer and sellers took advantage of that demand to withdraw some capital quicker than was possible prior to the marketplace. There has also been a substantial drop in the number of people looking to withdraw capital from the Access Accounts with a £10 million reduction in the queue.
Only around 2% of investors have sold at discount to date and only another 2% of investors are looking to sell at discount. Most investors have chosen to continue to invest with many cancelling their withdrawals or waiting until loan redemptions repay them over time with no discount necessary.
With the Access Accounts offering target rates between 3.75% and 4.1% per annum at present and that continuing in the September payment, the current but limited discounts on offer effectively provide extra interest in the form of the discount, something taken advantage of by new and existing investors alike.
Withdrawals from the Access Accounts are operating slower than usual as withdrawal is principally through demand from other investors. The Access Account Marketplace allows users to set ‘Invest’ and ‘Withdrawal’ instructions at a discount of their choosing, if any, potentially allowing investors to exit earlier. The system automatically looks to match ‘Invest’ and ‘Withdrawal’ instructions based on the discount applied and sought.
Stuart Law, CEO at Assetz Capital, said: “It is good that people now have another way to withdraw capital from their loan investments and we expect discounts to remain for a while whilst the impact of the virus on the UK economy remains uncertain and people want to rebalance some of their investments to cash.
“Nonetheless the number of people and amount of money looking to be withdrawn seems to be falling very quickly and the withdrawal queue is down some £10 million since two weeks ago as a result of many people cancelling withdrawal requests and others selling at a discount. The ability to come into the Access Accounts with a discount provides an even greater incentive to join our investors supporting the UK economy and earning fair rates of interest.
“The more important point, looking forwards, is what will income starved investors do next as interest rates fall further - negative rates are talked about arriving in the winter – and shares continue to see dividends slashed. The choice ahead for investors seems stark, choose speculations with no income like gold, choose the rollercoaster of the stock market with potentially reduced dividends, move to cash in a bank or under the mattress if rates go negative, or look for one of the few remaining income producing investments that supports the real economy and jobs. We feel that investments such as ours will continue to have a growing share of investors’ capital over coming years.”