Assetz Capital ISA Review
Assetz Capital is a well-established firm that has grown quickly since its conception – highlighted, by the fact that the company experienced growth of 300% in 2014.
The company offers business loans to SMEs and medium sized businesses for a range of business purposes including property development. Most have a duration of between six and 60 months – however, some are extended. Most tend to be substantial amounts of money.
The Assetz Capital website is colourful, attractively designed and easy to read, certainly a lot less corporate than most financial sites of this ilk and that gives a good indication of the type of market the firm is aiming for, i.e., newcomers to the IFISA market without much exposure to financial investment products. That said, the range of products on here are reasonably complex, taking time to assimilate.
Fortunately, there’s a phone number for support and most reviews concerning service are good. Assetz Capital is fast to respond and reps can answer most queries on the spot. The company rates four stars out of five on Trustpilot.
- Launched in 2013
- Over £50 million invested since the beginning of 2018
- Average ISA balance in excess £18K (industry average is £8,500)
- Expected returns between 4.1% and 15.5%
- Start from as little as £1
- Plenty of experience in ISA market
- Full FCA regulation
- Secondary market available
- Low bad debt history
- Strong underwriting and default recovery team
- No lender fees
- Provision fund coverage of 5%
- All loans secured by assets
The IFISA isn’t too straightforward with five different account options, each covering a basket of loans, offering tiered returns, based on risk:
Quick Access Account (QAA) – The most simple option and a good starting place for new investors. Idle funds are swept in here to gain an attractive 4.1% interest, but you can invest anywhere from £1 to £200,000.
30-Day Access Account (30DAA) – Investments can start from £1 with no maximum investment, this fund is made up of lower risk secure business loans that have passed Assetz Capital’s ‘strict’ testing policies. Gross annual target is 5.1%.
Great British Business Account (GBBA) – Again, invest from as little as £1 with no maximum investment limit, this time in a basket of small to medium sized business loans. However, it does this through diversification to minimise risk, dividing your investment equally between all loans available.
Property Secured Investment Account (PSIA) – Operates the same as the GBBA, only this time all funds are held in property loans.
Manual Loan Investment Account (MLIA) – Here, as the name suggests, investors manually choose which loans they want their money to go to with annual return targets expected between 7% and 9%. However, you will have to devote time to keeping an eye on your investments in case any go into default.
While returns start from 4.1% per annum (QAA), this seems conservative as most investors seem to be averaging 7-8% annually. Investors can even top this with a target of 10-15% by selecting individual loans with no reserve fund. These are competitive returns, based as you’d expect, on the level of risk involved.
Assetz Capital Loans
Target Rateup to 6.25% p.a.
Earn an aditional 1% p.a. gross target interest for a limited time only on all investments.
If Assetz Capital goes bust, trustees have the power to appoint new managing agents to run down the loans.
There’s a provision fund to cover 5% of bad debt (the firm expects a reasonably conservative 6% of loans to default). As all loans are secured by assetd such as property, that should give investors some peace of mind.
With over £50 million invested in their Innovative Finance ISA since the beginning of the year, there’s clearly something going for Assetz Capital’s model. And there appears a strong focus on recovering lenders’ money if a loan goes bad. This along with a sound track record in the ISA market, might be why so many investors are plumping for their IFISA product too.
The sweep function is a definite bonus here. This means that all idle balances are swept into the Quick Access Account (QAA) where they earn interest. When that interest is paid varies, depending on the product you choose.
On the downside, increased competition looks like it might be affecting the team’s success. Lender rates are beginning to fall.
Assetz Capital claims to be innovative and ethical by investing in housebuilding initiatives, so if you’re interested in making a contribution to society while investing your hard earned cash, then their IFISA might be the one for you. All in all, a pretty decent account from a solid company.
Updated: Monday, December 10th, 2018