P2P Global Investments yesterday published a prospectus confirming their intention to issue new C shares as initially announced on the 18th of June.
As we explained a few weeks ago, Existing C Shares will be converted into ordinary shares prior to the issue of this next batch of C Shares and when that existing capital has been fully deployed.
The company has made huge strides since the launch of the fund just over one year ago and seems to be streaking away from the round of recently launched competitors. Most notably the profile of P2P GI’s deployment is accelerating. After the initial raise in May 2014 the fund took 9 months to deploy £200million. The recent £250m C share round, and a subsequent £20m ordinary tap issue, was then deployed in 5 months. Now, after announcing an intention to raise at least £250m, they have confirmed a raise of £400m. This suggests huge confidence both in their ability to raise assets from investors and to deploy that capital into lending opportunities. AltFi would suggest that an eventual issue of £400m confirms that the pre-marketing of the funding round has gone extremely well. As to the deployment side of the equation this announcement comes after the company Chairman recently assured investors that they would only raise capital in circumstances where they were confident that they could deploy within a 6-9 month time horizon. Given they have just deployed £270m in 5 months investors should be confident they are on track to at least meet that target. Indeed the recent acceleration should suggest that they will out-perform even the 6 month milestone.
AltFi are also very excited to note the equity investments in leading UK platforms confirmed in the list of top 10 holdings. The list reveals that the fund has a similarly sized equity stake in each of the top 2 UK consumer platforms RateSetter and Zopa. It is interesting to note that the stake in each matches approximately 50 basis points of the capital available to the fund at the time. This fits with the previously stated intention of the managers to take moderately sized equity stakes in partner platforms of this sort of size, when opportune. As well as these positions in the UK market leaders the fund also has a smaller stake in the fast growing young UK platform Lending Works together with another small position in Australian consumer lending platform Direct Money. Intriguingly the top US holdings are not disclosed given that they are held in a US specific SPV. Given that the UK equity stakes confirm the funds stated strategy of securing equity in partner platforms we would speculate that the fund may have also secured positions in their US partners. Whilst Lending Club is quoted, and no such stake has been revealed, other US partner platforms include Prosper and Upstart.
News of this rapid and accelerating deployment rate, together with equity stakes in partner platforms, would seem to cement P2P GI’s position as the market leader in the quoted fund segment of market place lending.