New data from crowdfunding platform Downing Crowd suggests Crowd Bonds are gaining traction in the healthcare sector.
There’s also a particular focus landing on investment into high quality care homes, as Downing Crowd itself has launched a new £2.5m Crowd Bond for two establishments in Scotland.
The platform has invested over £45m in 11 care homes to date, after making its first move into the sector back in 1998. Notably, Downing raised £3m within eight days for a luxury care home in Edinburgh earlier this year, to be managed by Care Concern Limited.
This latest asset-backed care home Bond will allow investors to earn up to 6.25 per cent p.a. interest over 18 months, and is also eligible for inclusion in a Downing Innovative Finance ISA (IFISA).
Debt-based securities have long been an area of the alternative finance sector that financial advisors have been wary of, although a recent report on the niche suggested that this might change in the future.
The positive results that Downing Crowd is seeing from healthcare investment could be a potential indicator of this, as shifting demographics in the area are creating more appealing conditions for fresh investment.
“With the number of people aged over 85 estimated to increase by 60 per cent between 2014 and 2025, the demand for care homes – and the financing to support it – looks set to increase rapidly in the coming years,” said Julia Groves, head of Downing Crowd.
However, Groves also provided an ethical warning for investors.
She added: “There are some clear issues in some areas of the sector around the quality of care, which means we have placed very high importance on rigorous assessment and due diligence of the team operating the homes.”
Join AltFi at their fourth annual Australasia Summit to examine the future of lending in Australia. Where we present best practices across, technology, partnerships, open banking, governance, data access, consumer experience, capital markets & funding, the role of government and regulation.