2015 social lending summary

One of the focuses of this year has been to reduce the importance of P2P investments in my portfolio – at the start of the year P2P investments made up probably about 70% of my overall investments, then by the end of the year I’m finishing somewhere in the 25% range. Moving P2P investments under my business account will likely mean that I’ll allow this percentage to rise a bit again due to not taking such a huge tax hit.

The “winners”: Bondora, Omaraha & CrowdEstate

Bondora

I spoke about my Bondora portfolio in more detail in my previous post, but overall, despite all the drama, lack of information and overall chaos, Bondora is still performing well. Total interest earned climbed over 2K and my steady montly interest income was 100€. This level will start dropping with the withdrawals, but overall I’m happy. Total interest & recovery as follows:

2015totalinterest

2015recovery

Currently in the process of building the business account, focusing on Estonian loans only. Managed to give out 100 loans in December, if the pace keeps at that level, It’ll overcome my private portfolio rather soon.

Omaraha

For a long time I kept away from Omaraha due to not having enough extra funds available, and the relatively questionable reputation they had, but this year I finally looked into it. The interest rates are comparable to Bondora, and similarly to Bondora, I managed to give out about 100 loans in the month of December, making it seem realistic that it will keep up with the Bondora portfolio – so far other P2P portals in Estonia have struggled to offer meaningful volumes.

However, from others’ experience I am assuming a portfolio up to 10K shouldn’t be an issue even there. I’m predicting a 2:1 rate of deposits between Bondora and Omaraha. (Overall, lack of a secondary market remains an issue though!)

CrowdEstate

With the first exits made in the second half of this year, Crowdestate’s reliability also skyrocketed. One of my investments just exited and I have 9 more running (2 as a private person, the other 7 as a business). Other than the disastrous new web page they have done rather good. As usual, would have waited for more projects, but reliability is king, so I’d rather they take time and do proper due diligence.

Overall, will remain a part of my portfolio for sure, and waiting for interesting times once new projects start exiting – I’ll have to decide whether to start increasing my investment size or keeping it at the current level. This will probably largely depend on the amount of projects available.

The “losers”: Moneyzen, Estateguru

Moneyzen

Theoretically everything is fine with Moneyzen, practically if you want to actually build a meaningful portfolio, then no can do. Currently I haven’t managed to really increase my investments there (and in my opinion my loan % rates are low enough as they are). Also, two big issues – the promised low level of defaults (definitely not seeing that in my portfolio!) – still a lack of a secondary market (makes me not want to transfer in any more money). Overall picture at the end of the year, nothing too interesting:

2015moneyzen

Total interest earned for this year comes to ~60 euros, which is a nice sum of money, but as you can see from the standing money on the account – nothing is just happening. I’m rather sad about this, I hoped for a lot more from them.

Estateguru

Now, with Estateguru it’s an interesting case. They started out with a different profile than Crowdestate, but by the end of the year they had grown quite similar. Shows that there isn’t enough room in the Estonian market to be so specific.

Overall, I invested into some of their projects, but surprisingly I think the thing that put me off most was the minimum investment size of 50€. To keep any meaningful money moving (to reduce cash drag) I’d have to invest a bit too much money at the moment to feel comfortable (since, once again, no secondary market). Currently planning to not add more money in, maybe every now and then when I see a project that I really like.

The “unknown”: Mintos, Twino, Fundwise

Mintos

Mintos came to the market with a bang and is showing rather nice growth in terms of both loan volumes and investor amounts. Biggest draw is probably the buy-back guarantee, which I can see is luring in a lot of investors.

However, looking at the overall returns they are getting lower by the month, and I’m not sure it’s worth the effort to diversify into another portal (However, they do have a secondary market, so that makes them rather attractive). I might just throw in 500€ to see how they work.

Twino

Twino is another new portal that hit the market with a bang and as with Mintos, their main appeal is that of a buyback guarantee. However, due to the loans they give out – essentially payday loans – they run a rather more risky business model (or maybe more profitable, will have to read their financial reports to know that).

However, a guaranteed 12%-ish return is something that I can see people appreciating. Another thing that for me makes them more appealing than some others is the short time frame of the loans – being able to actually fully exit rather quickly instead of dealing with long term rescheduled loans and a drawn out exit. Once again, I might just throw in 500€ to see how they work (business accounts became possible just in December).

Fundwise

Fundwise is offering out a whole brave new world for P2P investors – equity based investing for those interested in start-ups. From afar it looks amazing, taking a closer look, there are a lot of problems and at this point I would still classify their main purpose to be similar to a charity.

Why? You get no rights, no returns guarantees (note even your principal is in any way guaranteed), there is no way of predicting any returns whatsoever, you are locked down for years and the valuations (500K-1Mil) are taken out of thin air. I get contributing if you feel very passionate about a business or a product, but I wouldn’t really take this as a serious investment.

 

 

6 thoughts on “2015 social lending summary

  1. I’ve doubled my small portfolio in Mintos during December thanks to the growing cash reserves (one of my tenants paid already his rent for January a couple days ago).
    Mintos works me very fine and I’ll probably continue investing there even when the rates are lower than current rates (after all, 10 % pa is still better than stock markets in the long run + the loans in Mintos are secured by a collateral of some sort, being it an appartment or a buyback guarantee).
    However, probably better not to advertise too much Mintos, otherwise others will come there also and the rates will drop even further. 😉

    1. It’s rather difficult to assess risk overall for P2P, but I agree, Mintos seems to be treating people rather well. Out of Twino and Mintos I’d probably open a Mintos account first.

  2. 1. What do you mean when you say that omaraha has a “relatively questionable reputation”?
    2. What is your target allocation percent for P2P platforms?

    Happy new year!

    1. 1. That was maybe vaguely worded – they have had issues with investor relations before (up to the point of an owner telling people off on the forums), just not an overall good image.
      2. If you mean allocation by platform, then currently I’m working at about 1/3 Bondora, 1/4 CrowdEstate, 1/4 Omaraha, and what’s left over into others. Estateguru and Moneyzen are essentially insignificant at this point, if I start with Twino or Mintos then I’d probably assign about 10% to them.

      1. Well, actually I mean the overall share of your investments. You said that “One of the focuses of this year has been to reduce the importance of P2P investments in my portfolio” and you mentioned your current share is 70%. What’s the target? Thanks!

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