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July 2016

In the next few years the winds of change will blow hard and soft.  One of the characteristics of angel investing, certainly for many UK angels, is that their portfolios are pretty much 100% exposed to the UK economy.  Both optimists and pessimists post the Referendum will be conscious that times they are a ‘changing.  It is not yet clear whether we will see a boom in the UK economy or have a bumpy ride.   One option for angels to mitigate exposure to the UK economy is to start investing in opportunities based overseas or starting to back companies which might be based in the UK, but which look overseas for the majority of their income.  Increasingly though, there are other asset classes to consider investing in which can balance exposure to the UK economy. By using these circumspectly it remains possible keep your angel portfolio focused on the domestic market.

It is clear that the trend for intelligent investors to take more control of what they are invested in is heading in only one direction – towards self-management of your portfolio.  This is part of a wider trend towards self-empowerment of the individual.  Never has this been more apparent in the area of equity and debt crowdfunding.

Investing in bonds is not something we tend to talk about much at AngelNews, partly because to date the principal opportunities for most investors are to buy into a bond fund or get exposure to debt by playing in the peer to peer market.  The challenge of investing directly in most debt or peer to peer platforms today in the UK, is that borrowers are largely UK based and frequently small.  So if you do use them you remain exposed to vulnerabilities in the UK economy.

Investing in lower risk bond funds is, frankly, quite boring.  It’s the sort of stuff you get your wealth manager to manage for you.  The riskier end of the debt markets, large or small, are not for the feint-hearted.

The arrival though of WiseAlpha in the market is set to change that.  For the first time, even smaller investors will have the opportunity to invest in top quality corporate bonds issued by household names on a deal by deal basis.  Bonds issued by the likes of Cadbury and its ilk, with generous exposure to the international markets and definitely only marginally affected by the ups and downs of the UK.  

I would be surprised if many of our readers are interested in investing the smallest ticket size of £100 per bond issue on the WiseAlpha platform, but some of you may think that the odd £10,000 could usefully be put to work in this way.  You will still get the enjoyment of making your own investment decisions and will have the advantage that WiseAlpha is offering a secondary market from day one, enabling you to trade out of a position if you want to.  And these bonds act as a nice counter balance to your UK angel portfolio.

You can find out more about the company at www.wisealpha.com and we are delighted that it will be our Headline Sponsor at The WiseAlpha VCT & EIS Investor Forum on 24^th November.