Wellesley mini-bond hits £25m 

Wellesley equals Jockey Club with the second largest UK corporate mini-bond.

Series 2 opens with rates of up to 8% (gross) per annum.

Wellesley aims to become the UK’s largest issuer of corporate mini-bonds.

Wellesley Finance Plc has closed Series 1 of its corporate mini-bond – the Wellesley Mini-Bond – which is one of the largest ever on the UK market having raised £25m since its launch in July 2014.  The Series 1 Wellesley Mini-Bond was not expected to close until the end of Q1 2016, but the combination of attractive interest rates and Wellesley’s asset-backed lending model has proven exceptionally popular with investors.

Following the success of Series 1, Wellesley has now opened Series 2 of the Wellesley Mini-Bond which aims to raise up to a further £50m.  Offering interest rates of 7%, 7.5% and 8% (gross) per annum, paid twice a year, for a fixed term of 5, 6 and 7 years respectively, Wellesley believes that its Series 2 Wellesley Mini-Bond is an attractive offer for Britain’s savvy investors.  The minimum investment per holder of Series 2 Wellesley Mini-Bonds is only £100, and thereafter in multiples of £10.

The proceeds of the Series 2 Wellesley Mini-Bond will be used to provide additional operating capital which will be used to fuel further growth of the Wellesley Finance property lending business.  To date, Wellesley Finance has originated loans of over £280m to property developers in the UK with an outstanding loan book of £228m, and currently holds security over £348m of property assets.

The Series 1 Wellesley Mini-Bonds have contributed to funding Wellesley Group’s progression, and helping Wellesley & Co be the fastest growing P2P provider in the UK.*  At the end of this Series 2 investment round, Wellesley Finance is expected to become the UK’s largest issuer of corporate mini-bonds.

Wellesley & Co has a unique business model, designed to make Peer-to-Peer lending straightforward. Wellesley Group places its own funds first into every loan it makes and retains a subordinated right to the loan security to that of its lenders (and therefore takes first loss).  The Wellesley & Co platform automatically spreads its entire loan portfolio over all lenders on its platform, automatically re-running this process on a weekly basis as new loans are funded.  The management believes that these factors, combined with the overall quality of governance and risk management, make Wellesley a high quality investment proposition within the alternative finance industry.

Graham Wellesley, CEO & Chairman said: “We are thrilled by the enthusiasm with which our existing Peer-to-Peer investors have embraced the Wellesley Mini-Bond.  We reached the maximum figure for investment of £25m in the Series 1 Wellesley Mini-Bond well ahead of schedule, highlighting the appeal of our unique asset-backed model.  The rising volume of funds and increasing size of the business are testimony to Wellesley’s leading position in the market.

“We expect the Series 2 of the Wellesley Mini-Bond to attract those from outside the Peer-to-Peer market, in that it gives investors an opportunity to invest, via the Wellesley Mini-Bond, in a non-listed business that offers returns of up to 8% gross per annum, paid in cash.”

 

British Business Bank Investments reports strong maiden results with £11.8m net profit and 7.6% gross return on capital 

British Business Bank Investments, the commercial arm of the British Business Bank, today announces its maiden results for the period to 31 March 2015 and the publication of its 2015 Annual Report and Accounts, which is now available on its website here: http://bbbinv.co.uk/

Highlights for the five-month period to 31 March 2015:

• Net profit of £11.8 million
• 7.6% gross return on average capital (6.5% net return on average capital)
• Income of £13.9 million
• Declared dividend of £10 million, payable to its shareholder
• Low net costs of £2.1 million, including direct staff costs of £0.6 million.
• £500 million invested, alongside £3.3bn of private sector funding across 24 individual investments
• Supported 7,194 businesses across the UK
• Awarded ‘Alternative Lender of the Year’ in the 2015 FinTech Innovation Awards

Highlights post period-end:

• Commitments at 30 September 2015 grown to £1.24 billion, representing 83% of £1.5 billion currently allotted to the Company
• Completed first investment in a challenger bank in October 2015 with £30 million invested in a tier 2 note issued by Shawbrook Bank

Peter Wilson, CEO of British Business Bank Investments, said:

“In our first period operating as an independent company we have been profitable, productive and innovative. The positive results for the period have supported the payment of a £10 million dividend, and I am particularly pleased that our gross return on average capital for the period of 7.6%, and our net return of 6.5% were both comfortably ahead of the benchmark return targets set for the company during the EU State aid process. We have seen a similarly strong performance post the period end and we look forward to building on our successful start, continuing to positively impact the smaller and mid cap business landscape in the UK.”

Keith Morgan, Chairman of British Business Bank Investments, said:

“British Business Bank Investments Ltd has established itself as a strong supporter of new and diverse finance markets, and has contributed significantly to the wider group.

“Its impressive maiden results demonstrate tangible early successes and lay the foundations for further achievement. We look forward to playing a continuing role in improving and developing smaller business finance markets in the future.”

Investment company adviser purchases in first nine months of 2015 up 55% compared to same period in 2014

The Association of Investment Companies (AIC) has published data from Matrix Financial Clarity, which demonstrated that over the first three quarters of 2015, purchases of investment companies on platforms by advisers and wealth managers reached £549m. This was 55% higher than the same period of 2014 (£355.2m) and up 241% in comparison to the pre-RDR levels of the first three quarters of 2012 (£161.2m).

Investment company purchases on adviser platforms totalled £146m in Q3 2015, up 26% compared with Q3 2014.  This was the second highest quarter on record.  In Q2 2015 purchases of investment companies spiked at £270.9m, partly driven by the launch of Woodford Patient Capital.  As a result Q3 2015 investment company purchases were down 46% on Q2.

Total purchases of all products through adviser platforms decreased 6% in Q3 2015 to £25.3bn, down from the record high in Q2 (£26.8bn).

Net demand for investment companies in Q3 2015 was £70.5m, the second highest quarterly figure on record.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC) said: “It’s very positive to see such strong adviser demand for investment companies in the first nine months of 2015 with purchases significantly up on 2014 and an impressive 241% higher than pre-RDR levels.  We believe RDR has been an important reason behind this increase in investment company purchases, removing a source of bias and raising standards of advice.

“Demand for investment company training remains high, so this year we are planning to provide more adviser training than ever.  We are currently running VCT seminars, and are upgrading our online training. We’ll also be launching a series of interactive workshops on investment companies to reach advisers all over the UK.”

Other findings

·         The most popular sectors for adviser purchases in Q3 2015 were Global (19% of purchases) and UK Equity Income (14%). This represents a return to the usual position after the launch of Woodford Patient Capital made UK All Companies the most popular sector in Q2 2015.

·         The third and fourth most popular sectors in Q3 were Property Direct – UK (9%) and Infrastructure (5%).

·         In the first nine months of 2015, three platforms accounted for more than four-fifths of all purchases of investment companies. These were Transact (47%), Alliance Trust Savings (19%) and Ascentric (16%).

·         The number of adviser and wealth management firms purchasing investment companies in Q3 2015 was 1,009, down on the Woodford-influenced Q2 (1,119) but still the second highest quarter on record.