First look into Viventor

There are new P2P lending platforms popping up like mushrooms. In many ways this is good – you have more platforms to choose from and a way to both manage risks and find an instrument most suited to your profile. On the other hand, it’s becoming difficult to keep up with all the different sites – if you’re Estonian you now have at least 10 P2P sites to choose from. So, to get a look into what the Latvian P2P site Viventor is about I got to ask some questions from their Operations Officer, Toms Niparts.

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Viventor profile:

  • Loans secured by mortgages
  • ~6-7% estimated returns p.a.
  • Buyback guarantee
  • Minimum investment 10€
  • 2,8 million euros in loans so far

Q&A

What is Viventor’s main focus (what type of loans, which markets? do you have future expansion plans?)

Our main focus at this point is to offer high quality secured investments that carry very low levels of risk. As we move further, we are planning to add various other products with different levels of risk, as well as get into large scale real estate projects. We are aiming to serve investors from all over Europe, but it will obviously take some time to reach this goal. Currently, we see the most interest from Southern and Western Europe.

What do you feel is your competitive advantage when compared to other platforms on the market?

One thing is definitely the extremely low risk levels of loans. I don’t know any other platform that offers secured loans with LTV being between 20 and 40%, plus with a Buyback Guarantee. We are also putting a major focus on seamless investing experience and design of the platform, so that using it would be obvious also for people not very familiar with web products.

I noticed that you have a buyback guarantee – could you explain further on which terms it works and why you decided to have a buyback guarantee? (since many sites do not)

If a loan is 60 or more days delinquent, the loan originators will offer to buy back the investment at the face value (=price that investor paid to purchase the stake). The investor also has the right to refuse, and wait for the debt to be recovered, simultaneously accruing delayed interest and late fee payments.
Since we are a new platform without a known brand name, we have to build our image, and show that we, as well as our loan originators have skin in the game 100%. Buyback Guarantee is only one of the ways of doing it. All of the loans are also 100% pre-funded, and the originators have the first charge on the mortgages should a borrower default.

When looking at the loan listings – 6%-7%, why do you feel that this interest is competitive? (What are your historical returns & how do delayed/bankrupt loans get handled?)

We believe that 6-7% is a very good return for the deal offered. Keeping in mind the already mentioned low LTV levels, another major factor is that all the mortgages are located in Spain, which obviously speaks about their liquidity.
About the historical returns – there is not a whole lot of data so far, since we started out only less than two months ago. The weighted-average return of our loan book, for example, is 6.82% p.a. Fixed. About non-performing loans: the loan originators have debt collection partner companies for this purpose.

Anything that you want to add, that you wish investors knew about?

Apart from low levels of risk, Buyback Guarantee and the noteworthy collaterals, we also offer fixed interest, which only a few platforms on the market offer. This means that you receive the same amount of interest every month, instead of diminishing interest payments.
We have a plenty of loans available that reach the maturity within 12 months or less, so this means that an investor is not locking up his money for a long period of time. The Secondary market is coming soon, as well as a number of other loan products with different levels of risk and returns. Currently, Viventor is available in English, German, Russian and French, but we will be adding a few other languages in 2016.

First impressions

A lot of investors feel that one of the key issues of P2P lending is the risk, so for them mortgage backed loans with low LTV would clearly be something interesting. However, looking at returns currently offered by other P2P platforms, it’s an issue of risk vs reward, but for people with a lower risk tolerance I can see these returns being attractive.

Of course they have a somewhat uphill battle ahead of them, since there are many P2P portals on the market offering different products even in the same niche (EG in Estonia, Mintos in Latvia). Hope they do well – the market could always use good competition.

Estateguru portfolio status, 3 months

A while back I wrote that I took a look into Estateguru as an investment opportunity due to wanting to both diversify and perhaps move a part of my lending portfolio into real estate backed loans. Since then they’ve slowly gotten their pipeline going and there is new projects happening every now and then.

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What do I like about Estateguru so far?

  • While the interface and web page could be smoother, all numbers and transactions are clearly visible and I’ve had no issues so far trying to find information and failing to. (Looking at you here, Bondora!)
  • There’s a reasonable amount of data on each investment and there’s enough projects moving currently to have hope of not much cash drag happening.
  • The loan terms are short, meaning that the lack of a secondary market at the moment isn’t as big of an issue as it would be if the investments were 3+ years.
  • I don’t need to log on often to keep track of what’s happening – in that sense it’s way more passive than some other investments I have. (I trust they won’t make any big changes without previous info.)

Portfolio plans?

I’m currently a bit torn when it comes to my plans for Estateguru. Due to the short term of the projects, it doesn’t take long to create a kind of a cycle of investments. (It’s shorter than with Crowdestate for example). This means that in theory out of all my investments Estateguru is closest to a classical CD ladder (A strategy in which an investor divides the amount of money to be invested into equal amounts to certificates of deposit (CDs) with different maturity dates.), with markedly higher interest though!

This means that I’d have the option to keep investing 50€ per project (the minimum), until the year comes full cycle (next July) and then re-evaluate whether I want to increase the sums that I invest or keep them at the same level and lessen contributions. (Since you get interest paid, then for every next 50€ investment you need to add in less of your own money, and just reinvest the returns).

My current plan is to keep to the minimum to slowly diversify my portfolio and then re-evaluate after like half a year. There is always the question of what happens if a project defaults and issues arise or how many projects they’re capable of bringing out to keep cash drag to a minimum. Definitely they seem to have hit the ground running and are doing well enough that I’d dare to give them more importance in my P2P portfolio.

*’If you feel like starting to invest with them, then using the promotion code EGU05422 will cash back 0,5% of your invested amount to both yourself and me as the person who referred you for the first year of investing.