P2P Global Investments announced that it has closed £400 million in a new offering of C Shares on the London Stock Exchange. The deal marks the latest fundraising by P2P Global Investment, an investment trust which allocates capital to borrowers on marketplace lending platforms. Spreading out capital on multiple lending platforms, P2P Global Investment participates in a variety of loan size and yield amounts, with shareholders receiving 85% of profits from its lending. The new shares are expected to begin trading on Tuesday, July 28th.
Overall, P2P Global Investments has raised nearly £900 million since launching the trust in 2014. According to the firm’s prospectus for its latest offering, there are currently agreements with Funding Circle (UK), RateSetter, Zopa, Crossflow, Upstart, Prosper and Harmoney in relation to investing on their platforms.
Why a Trust?
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As P2P lending platforms, the same private investors who purchase shares of P2P Global Investors have the ability to lend directly to borrowers. Cutting out any middlemen also removes fees associated with investing through using a trust.
Despite the potentially lower returns, P2P Global Investments has experienced a growing demand for its shares. Proving this demand is an increase of retail oriented investors taking acquiring positions in this trust, as seen through announcements by investment houses rising above the 5% threshold of owning P2P Global Investments stock. In addition, after initially proposing to raise £250 million in their current offering, the firm increased the sale to £400 million in new shares following higher demand for the deal.
For investors, the benefits of the trust is diversified exposure of loans types and in different countries. In addition, while marketplace platforms may claim to be ‘peer to peer’, the vast majority of capital being supplied is from institutions. Therefore, when competing with larger institutions which have dedicated technology and loan analysis teams, private investors may not have the resources to be able to participate in the best deals on a risk versus reward basis.