LEND launches AMC on P2P lending with ISP Group

Cut the Middleman in Lending and bring back returns to Fixed Income Investors. We are happy to announce that, after our great launch in January, we extended our offering with LEND - Switzerland AG to provide Swiss professionals or qualified investors a diversified access to Swiss prime private and SME loans.

Swiss fixed-income investors are in a difficult situation. The low interest rate environment is causing returns to melt away like snow in the spring sunshine. Positive returns on investment-grade bonds are hard to find. But there is a promising alternative.

Even bonds of junk-rated borrowers such as Ford Motor Credit (BB) and Petróleos Mexicanos (BB) are now trading at less than 1.5% yield to maturity in Swiss francs.

Investors focused on the Swiss market therefore often take refuge in real estate or yield-optimising structured products such as barrier reverse convertibles (BRCs). But even the latter are not an obvious solution at the moment due to the current highs in equities and the rather low volatility compared to last year.

Strong alternative

Crowd lending offers a stable alternative. Thanks to peer-to-peer platforms, investors can invest directly in loans without a middleman. Switzerland’s leading platform lend.ch has been on the market since 2016 and has so far brokered more than CHF 120 million in loans (3,000+ projects) thanks to its 3,500 private and institutional investors on the platform.

 

The performance history speaks for itself, given that after defaults and fees, investors generally enjoy an annual return in Swiss francs of between 3% and 5% (see Graph 2), which outperforms the returns of the Swiss Bond Index many times over. Not surprisingly, the platform was also able to accelerate its growth significantly in 2020 despite the COVID-19 pandemic.

 

Institutional investors have increasingly recognised the appeal of loans as a direct asset class. In addition to institutional investment funds and family offices, Swiss pension funds are also active on the platform.

Full repayment

Because institutional investors generally require an investable vehicle (ISIN/valor), lend.ch has launched an actively managed certificate (AMC) in a collaboration with ISP Securities. The product invests in a broadly diversified loan portfolio of Swiss private individuals and SMEs and as a rule is tradable on a daily basis thanks to an integrated cash buffer.

Investors thus have the advantage of being able to delegate recurring investment decisions and also – thanks to the product’s tradability – of not always having to wait for the full repayment of individual loans in the portfolio in order to access liquidity.

Investment on a rolling basis

Via the RoboInvest function of the LEND platform, the liquidity available to the AMC is continuously invested in a broadly diversified portfolio of first-class Swiss debt loans on a rolling basis. ISP Group also contributes further to the liquidity of the AMC through a continuous secondary market.

 

Read the full article at Finews

 

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This document is prepared by ISP Securities Ltd., Zurich, exclusively for qualified/professional investors. It is designated to the person having received it from a representative of ISP Securities Ltd. and not intended for any other person. This document must not be made publicly available. This document is for information purposes only and is neither intended for nor targeted at any person who by domicile or nationality is prohibited to receive such information according to applicable law and regulations. This document is not intended to constitute an offer or solicitation nor a recommendation or advertisement for the purchase or sale of products or services and it is neither legal nor investment advice. While ISP Securities Ltd. makes reasonable efforts to obtain information from sources which it believes to be reliable, ISP Securities Ltd. makes no representation or warranty as to the accuracy, reliability or completeness of the information.
Unless otherwise stated, all figures are unaudited. The development of the values mentioned in this document originates in the past. Past performance is no guarantee for future performance. Each investment bears risks, such as value and profit fluctuations. Investments in foreign currencies may be subject to currency exchange rates. Particularly, ISP Securities Ltd. recommends that the recipient, if need be by consulting professional guidance, assess the information in consideration of his personal situation with regard to legal, regulatory and tax consequences that might be invoked. None of the information contained in this document constitutes financial advice or analysis within the meaning of the Swiss Bankers Association’s Directives on the Independence of Financial Research.

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