LHV Bank Integrates Estateguru Investments in Online Banking Dashboard

June 19, 2019January 13, 2020 wiseclerk 1 Comment

Who? What? You might wonder why that is relevant as most readers are unlikely to be LHV Bank customers. LHV Bank is a bank in Estonia.

I think it is highly interesting, as it is – to my knowledge – the first time a bank has integrated p2p lending investments in its customer interface. So the LHV bank customers, not only see their accounts and stock depots, but also their Estateguru* investments conveniently listed in their online bank dashboard. Much has been talked about what role could banks have in p2p lending (mere transaction banks? providing credit lines?) and also there is a lot of speculation if PSD2 (open banking) will help fintechs to seize the access to the customer from banks because they could control the user interface in the future. But this is actually a first step a bank takes in the opposite direction. By aggregating “non-bank” information inside the dashboard, they aim to make the banking interface more useful for the customers.

(Source: Estateguru)

Press release:

LHV customers can now see their short term property loan investments on LHV internet bank. On the summary view of internet bank, besides public stock exchange investments, one can see also alternative investments like short term property loan investments and cryptocurrencies, thus making it possible to get a quick and comprehensive overview of one’s investment portfolio. EstateGuru and Coinbase are the very first services to be switched on to the platform.

“LHV’s new service is the best example of cooperation between banks and fintech. LHV is most definitely a trendsetter in the banking sector. It is fulfilling to see that short term property lending has become a solid part of investments, and traditional banking has accepted it. EstateGuru has more than 25 000 investors throughout Europe, and the number is rapidly growing among both retail, professional, and institutional investors. We can provide our customers with more added value via interfaces like that of LHV’sÂ “, commented EstateGuru’s COO Mihkel Stamm.

Alternative investments have become a substantial part of the Estonian investment scene, particularly among new investors. There are more than 13 000 people in Estonia who have invested in crowdfunding platforms. The fixed rate of return on debt instruments and access to the new and attractive asset classes have found their well-deserved place in investors’ portfolios. The better the quality of information, the more successful the investors.

“LHV aims to keep pace with its customers’ investment activities and that’s why we decided to take a step closer to the universe of alternative investments. The added value of this new service for our customer is a better and more comprehensive overview of the assets, thus making the portfolio management more successful “, added the Head of Investment Services at LHV, Martin Mets.

About EstateGuru

EstateGuru is the leading European platform connecting an international community of investors and businesses offering the highest diversification options for investors and flexible terms and speed of funding for businesses. The mission of EstateGuru is to provide hassle-free and flexible financing to property developers and entrepreneurs as well as diversified property backed cross-border investment opportunities to its international investor baseâ€”from the small individual investors to the institutions and everyone in-between. EstateGuru has more than 25 000 investors from 45 countries and the total money lent to date is more than 122MEUR. …

About LHV

LHV is the largest domestic financial group in Estonia. LHV’s mission is to help to create Estonian capital. According to LHV’s vision, the people and enterprises of Estonia dare to think big, start things and invest in the future. LHV’s values are to be simple, supportive and effective.

Impressions from the P2P Conference in Riga

June 10, 2019January 13, 2020 wiseclerk 1 Comment

On Friday and Saturday I attended the P2P Conference* in Riga. It was the first p2p lending conference in Riga and I was very impressed how well organized it was for a new event. Kudos to the Targetcircle staff who organized that. The audience was platforms, retail investors and bloggers/youtubers mainly from the Baltics and Germany but also sprinkled in from other countries all over Europe. I would estimate about 350 to 400 people in total.

Platforms presenting and attending were nearly exclusively from Eastern Europe (mainly the Baltics). Most of the retail investors came for the chance to meet and speak to the platform representatives in person.

The organizer of the conference is Norwegian affiliate technology company Targetcircle. Targetcircle was founded in 2014. I became aware of them when Mintos switched their affiliate tracking from an inhouse solution to their system around November 2016. Since then they won a wide variety of Eastern European p2p lending platforms as clients for the affiliate tracking solution, but also recently the Irish platform Flender*. Targetcircle concentrates on the underlying technology as a marketing solution for fintechs but also as a (whitelabel) technology for other affiliate networks. The CEO told me he aims next to win more clients for his solutions in the UK and Spanish market and then later on in East Asia.

The conference started with a day of presentation, demos and time to visit the exhibiting platforms at their booth. There was ample time for networking with good catering (outside barbecue with DJ music). A recorded livestream video of the main stage activity is available here.

The main news announcement on the conference was Mintos* unveiling the new Mintos Invest and Access offer. See this article I wrote about Invest & Access.

I really enjoyed the opportunity to talk to so many platform representatives, other bloggers and hear the opinion of many retail investors from recently started to 10+ years investing into peer to peer lending. In general the investor crowd was optimitic about the future prospects of investing into p2p lending and we all exchanged experiences, opinions and tipps on strategies, selecting platforms and evaluating risks.

The atmosphere was very relaxed and informal and it moved to a vacation feeling when on Saturday the venue was located on a beach at a lake.

Attendees spent most of the time chatting and networking, but some more venturous ones took up the offer to try wakeboarding or stand up paddling or got active playing volleyball or boule.

Targetcircle plans to do the conference again next year and I am looking forward to going again.

New product: Mintos Invest and Access – What it is and My Opinion

June 9, 2019January 13, 2020 wiseclerk 6 Comments

Mintos* will launch a new product offer called Invest & Access tomorrow. It was already unveiled and presented at the P2P Conference in Riga on Friday. Before I write about it watch the video below for about 10 minutes with Mintos CEO Martins Sulte explaining Mintos Invest and Access.

the video should autostart at the right point. If not it is at 2:29:22

The new offer makes it super-easy for investors to invest and automatically diversify through a very wide selection of loans. Mintos does that by investing the money in all loans on the platform that carry a buyback guarantee and are from originators that are at least 6 months on the platform. Mintos promises that investors will be able to cash out easily (subject to market demand) instantly, saying investors don’t need to bother about handling the loan selling on the seondary market. Mintos does that by selling the non-late loans to other investors.

The investor can still see how the portfolio he holds is composed on an overview page. One important aspect for the market dynamics on Mintos marketplace is that Invest & Access will invest before the autoinvests.

Mintos is cleary aiming to make it easy for new investors that don’t want to spend much time thinking about the investment and optmizing yields by giving them the average yield by just one click. The Invest & Acesss page will show the weighted average interest rate, which at the time I saw that page was showed as 11.98%. But the figure will change and update as market conditions fluctate and as the FAQ says it is not guaranteed.

One important point in the FAQ/footnotes is that the ‘instant access’ only applies to current loans. That means if the investors has e.g. 15% late loans, that would mean that he gets only 85% as instant withdrawal and for the remaining 15% has to wait until either the loan is bought back by the buyback or becomes current again (I suppose in that case the investor could trigger another cashout).

Investors can runs both Mintos Invest & Access as well as the existing autoinvests, should they which, but in that case Invest & Access would use any available cash the investor has first, therefore I would guess that there are rarely any funds left for the autoinvests to use.

My Opinion on Mintos Invest and Access

Mintos clearly offers a product that makes it as easy as possible, lowering the entry hurdles especially for new investors. And as Bondora Go&Grow* shows there is a high demand by investors for simplified products. Statistics published by Bondora show that in April 2019 63% of the new investments in that month where conducted via the Go&Grow product, which is constantly gaining over the other investment methods Bondora offers. Other examples are the Access products offered by British Assetz Capital*.

Looking at it from the perspective of an investor that is a little more experienced and willing to spend a little time Invest & Access does not seem an attractive offer. By definition it offers the weighted average interest rate.

By setting up own autoinvests at Mintos, keeping a good diversification and foregoing the highest risk, investors can currently achieve about 13-14% yield on Mintos. So if they would instead use the new product they would have about 2-3% lower yield, and have actually less control on which originators they invest in. An important point to consider, is that the value Mintos shows you, is the average interest rate, NOT the expected average yield. The yield will be significantly lower than the interest rate as Mintos will include buyback loans from originators with long grace periods or originators that do not pay interest income on delayed payment. Excatly those are typically avoided when investors configure their own autoinvests.

And concerning the argument of liquidity. Mintos is very liquid anyway. Without using the new product it is no problem to liquidate a portfolio within a few minutes toÂ a few hours it just depends on the price. Sure you might have to offer a discount. Maybe depending 0.2%-0.6% on average. But that is a small price if you had the higher yields before.

So would I recommend using Invest & Access over the ‘traditional’ way of setting up own autoinvest? There is one use-case I would. If an investor wants to invest very short-time (for whatever reason ‘parking’ money) for less than say 120 days, than it is worth considering.

In my opinion on why Mintos launched the new product, there are actually two reasons:

there is demand for a simplified product and this new product shall satisfy that
the new product will help on the sales site for attracting and onboarding new orignators. Originators that can only offer rates that are below the average interest rate on the Mintos platform so far were hard to sell. With Invest & Access they will be just part of the bundle and automatically sold (once the originator has been on the platform 6 month)

That brings us to an interesting point. How will Mintos Invest & Access the market dynamics? The big factor here is that Mintos Invest & Access happens BEFORE autoinvest and manual investment. There are already (even before launch) speculations and fears of investors that it might bring down interest rates or ‘force’ them to use the new product to avoid cash drag, but I think it is much to early to make any prediction what might be the outcome. But I sure am curious what this will do to the activity on the Mintos marketplace.

What are your opinions on the new product? Please share them in the comments. Thx.

P.S.: The following interview with the Mintos CEO was recorded just before the announcement of the new product, therefore it does not cover Invest and Access – but it has a lot of information on the current state of Mintos.

(Source: Bernhard Hummel)

Estateguru Raises 1.3M EUR from Speedinvest

June 5, 2019January 13, 2020 wiseclerk

Baltic property p2p lending marketplace Estateguru* announced, that it has raised a 1.3M EUR round led by Speedinvest f. Speedinvest f is a focus fund launched by Speedinvest, targeting Fintech investments across Europe. Speedinvest will support EstateGuru in its geographic expansion across Europe.

Marek PÃ¤rtel, founder and CEO of EstateGuru, outlines the companyâ€™s mission to become the largest pan-European real estate financing marketplace: ‘Today, EstateGuru has become the largest platform in mainland Europe, showing an average annual growth rate of 100%. Simultaneously, we have discovered excellent opportunities to further increase our market coverage and it is for this purpose that we have drafted a clear technological development plan that requires a strong partner in order to be implemented successfully.’

Christopher Zemina, Investment Manager at Speedinvest, explains the background of the investment: ‘EstateGuru is the story of a small team that has achieved extraordinary growth without much external funding. The team has executed their plans and constantly outperformed our expectations. We are determined to support the company in its next stage of growth.’

Estateguru founder and CEO Marek PÃ¤rtel

International P2P Lending Volumes May 2019

June 4, 2019January 13, 2020 wiseclerk 5 Comments

The table lists the loan originations of p2p lending marketplaces for last month. Mintos* leads ahead of Zopa and Ratesetter*. The total volume for the reported marketplaces in the table adds up to 607 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Sourced.

Milestones achieved this month (total volume since launch):

Twino* crossed 500M EUR
Linked Finance* reached 100M EUR

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA rates.

Table: P2P Lending Volumes in May 2019. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed: Continue reading →

Review: My P2P Lending Portfolio May 2019

May 17, 2019January 13, 2020 wiseclerk 7 Comments

I covered my p2p lending portfolio periodically over the past 12 years in this blog. The following report is a snapshot on how it is composed right now (May 2019) and which strategy I will take for the next months. As you can see below I aim for a widespread diversification (over different platforms as well as geographically) of my p2p lending investments.

Mintos

Mintos* is my biggest position. I run a trading strategy on Mintos. Mintos gives my net annual return as 15.1%. Calculating it myself based on the deposits and withdrawals I get a XIRR value of 24.8%. The cause for the huge discrepancy is that Mintos does not account correctly for the cashback of the campaigns. I heavily traded, when Mogo ran a campaign. For example I invested in new Mogo loans that were offered with a 2% cashback on the primary market, nearly instantly sold them with 1.8% discount on the secondary market and pocketed the cashback. Rinse and repeat.

I am satisfied with the current degree of diversification over loan originators in my Mintos portfolio. The bulk of my investments is in loan terms between 3 and 30 months at interest rates ranging from 13% to 15%. The lower interest rate loans are usually only held temporary as part of my trading strategy.

For the coming month I plan to keep my Mintos* investment at roughly that amount, reinvesting the paid principal and interest.
New investors registering via this link at Mintos, get 1% cashback on amounts invested in the first 90 days. Mintos is currently not accepting UK investors.

Linked Finance

My second largest p2p investment is on Irish SME loan platform Linked Finance.

Diversification achieved is good. The majority of my loans have interest rates between 8% and 11%. Most loan terms are 2 or 3 years.

I “collected” 7 loans in default (double dip on the golf loan). But 5 of these had repaid more than half the principal before they want into the default state so the principal in default sums up to only 270 Euro. My self-calulated XIRR value is 6.4% if I totally write off the amounts in default and 7.1% if I assume that half the amount in default will be recovered. I plan to slightly increase my Linked Finance* portfolio in the next months. Linked Finance is not offering any cashback or bonus rewards for new investors.

Bondora

Bondora is my third largest and oldest (still running) p2p lending portfolio. I started in 2012. My self calculated XIRR value is 16.6%. A yield that high is not achievable nowadays anymore. My portfolio profited heavily from the first years when interest rates were typically 28% to 34%.

I am currently investing into Estonian A and B loans using these autoinvest settings. I have used these settings unchanged for 11 months now and it is running totally hands-off with no maintenance required.

On Bondora* I reinvest the bulk of my repayments and occasionaly withdraw some funds. New investors registering on Bondora using this link get a 5 Euro sign-up bonus.

Ratesetter Australia

Ratesetter Australia* is my fourth largest p2p investment and also one of my youngest. I started in August 2018. My XIRR value self calculated in AUD is 9,1% if I include the 75 AUD sign-up bonus and 7.4% if I do not include that.

My money is mostly invested on the Ratesetter 5 year market at an average rate of 9.2% (that is after fees but before withholding tax).

In the past months the interest rates have dropped considerably therefore I am parking some funds on the 1 month market or invest them on the 3 year market.

I am reinvesting all repayments at Ratesetter Australia. If rates go up again I plan to do that on the 5 year market, otherwise I’ll settle for the 3 year market. It is a little complicated to register as a non-resident, but I have described how I managed to sign up as a European here. New investors can earn a 75 AUD promotion bonus by investing 2,000 AUD or more in our 3 year Income or 5 year Income lending markets before 31st May 2019. Achieving that requirement in time will not be easy, even if you start directly.

Iuvo Group

The fifth largest position of my p2p portfolio is invested at Iuvo. It is running hands-off and does not require any maintenance.

I continue to reinvest all repayments. Iuvo pays new investors a very generous cashback of up to 90 EUR. For more details and how to get it see the cashback overview page.

Estateguru

After I completely exited Lendy in last autumn, baltic Estateguru* is now my largest platform for property secured loans. I don’t use the autoinvest. Instead I periodically login and manually invest into a new Estonian loan secured by a first rank mortgage.

I mostly reinvest all repayments. New investors get 0.5% cashback for all investments in the first 90 days, if they sign up using this link.

Fellow Finance

I used to have a larger portfolio at finnish Fellow Finance but I did not want to go below 12% for 4 star Finnish consumer loans therefore I started withdrawing funds last year. In January the sale price collections paid tor Finnish loans dropped from 70% to 53% which reinforced my decision to exit.

October

I am running down my portfolio on French SME loan marketplace October. With the low interest rates and rising defaults (6 out of 52 loans) in my portfolio the risk reward ratio is not for my taste anymore.

New investors signing up on October using this link* can get 20 EUR bonus (200 Euro minimum investment)

More p2p lending marketplaces

Due to professional interest (want to gain first hand experience) and curiosity I have more p2p lending portfolios at Ablrate* (small, reinvesting), Assetz Capital* (tiny, reinvesting, possibly increasing), Bulkestate* (tiny, testing), Crowdestate* (small, reinvesting), Finbee* (tiny, nearly exited), Investly (small, reinvesting), Lenndy* (tiny, watching), Monestro, (tiny, exiting), Moneything* (small, exiting), Neofinance* (small, testing, probably running down), Reinvest24* (small, testing), Robocash* (small, reinvesting), Zlty Melon* (tiny, exiting next month when terms are up).

Crowdinvesting

Not p2p lending but investing in startups. I am a huge fan of Seedrs*. Investing in startups is of course even higher risk than investing in p2p lending. Nevertheless I went ahead and built a big Seedrs portfolio over the last years. Snapshot:

P2P Conference Riga

I am looking forward to be at the P2P Conference in Riga* which is less than 4 weeks away. The conference is reasonably priced (enter promotional code P2PEARLYBIRD40 for 40% rebate) and Riga can be reached with cheap flights from many European cities. BTW, Riga is an interesting town, if you have not been there yet you could combine the conference with some sightseeing.

P2P-Banking

P2P Lending Marketplace News and Reviews

Baltic