Portfolio update August 2020

Hello fellow investors,

We are only in the beginning of September but from Germany the summer definitely seem to be gone.  I don’t know if this is the weather’s impact but i feel a bit lazy today to try coming up with a proper introduction on what the development on the outbreak fronts and the political decision/reaction to it might indicate for us, p2p investors.

And honestly, what the hell do I know for sure? 😜

Well, ok, just my 2 cents briefly: We have been told many times that bankruptcies will pile up from September onward when state support programs will start fading and unemployment will rise even more. We are about to find out now basically to what extent this will hold true and at what pace. What will be the impact on p2p borrowers, whether they are companies, real estate developers or individuals?

My answer to that question since the last few months has been (i) to wind down P2B – which has proven difficult since there is no secondary market in my P2B platforms – (ii) to focus on higher quality loan originators by joining/leaving platforms accordingly and (iii) keeping the majority of my portfolio on real estate segment due to the existence of physical asset.

Only the future will tell me whether it was the right decision but that is the one I am the more comfortable with and for the time being this is what matters.

Another risk besides defaulted loans for the p2p investors that may materialize in the coming months/year is the inflation rate eating up the returns. We have been living in a low inflation world for a long time now – in western countries at least – and for most p2p investors coming from EU or the US it has not been a real topic to consider. But what if it would change? How will investors react? Would they take even more risks, trying to keep net returns as high as possible, or will they just stop bothering investing considering the risk of losing their principal in such context?

This question may actually have some real grounds in the future. Indeed, the US Reserve Federal announced on 27 August an important change in its policy. The Fed foresees to allow inflations rate to be higher than the 2% targeted by not raising its interests rates whenever this would happen. The objective is obviously to fight against unemployment and to promote growth but it would impact negatively investors including in p2p.

On those sweet perspectives, let’s start the portfolio review!

Passive income

Total = € 809.09 (vs € 870.52 in July)

Rent: € 513.56 (stable) from 1 apartment

P2P portfolio: € 260.22 (- 6.2% vs July)

Cash Dividend REIT (SCPI) : € 34.02 (after tax)

Cash dividends stocks : € 1.29 (after tax)

My ETFs are accumulated and dividends are therefore automatically reinvested. Those dividends are not included in my passive income.

Size, breakdown and profits

I have created a page with all sign-up bonuses for the platforms I invest in that you can visit here. Since my March update, I decided to remove TFG Crowd considering that I am not confident about this platform.

But let’s now focus on the P2P portfolio in particular:

My 2 regulated French platforms keep representing the bulk of my portfolio with around 60%. I am currently making changes with several platforms I am thinking leaving and other I am increasing. I added 1 new platform this month (more later on that): Evoestate.

In August I increased my portfolio size with € 53.3 k, i.e + € 3.5 k vs last month. Here is the performance of my portfolio platform by platform:

My monthly XIRR in August decreased to 6.27% vs 6.87% in July. The main reason is that I did not get interests from my largest platform contrary to the previous month.

Platforms

Now let’s go through the different platforms by order of exposures. You can always make use of the table of contents on top of the article to navigate wherever you want.

Fundimmo and Wiseed

I decided to group my two French platforms on which I mostly invest in real estate. They represent currently together about 60% of my crowdlending portfolio, a bit lower share than previous months.

My opinion on Fundimmo, French regulated real estate platform.

My opinion on Wiseed, French regulated platform enabling to invest in real estate and business bonds or in equity of start-up.

I invested in 1 project in Fundimmo with € 1k in Paris increasing my exposure on the platform. I did not get any reimbursement in August.

I did not invested on Wiseed, there was only few new projects published in August and I focused on other platforms. I got 1 real estate project reimbursed.

On Wiseed I am still waiting on the negotiations’ outcome for one SME I invested in € 1k. The proposal the bondholders will vote on should come in September according to the platform.

Mintos

My opinion on Mintos with my pros and cons, the criteria to look at to invest in loans and loan originators and my views on the pending payments feature.

I am now reinvesting in 5 loan originators (Delfin Group, CreditStar, Placet Group, Mogo, Iute Credit). I decided to exclude Wowwo due to the depreciation of the turkish currency vs euro as I do not have evidence that Wowwo is hedging and cover this risk. I do not sell, only slowly decrease my exposure by reinvesting in the LOs I previously mentioned. Even considering a higher concentration of my portfolio on Mintos I will still have less on each of them than on other loan originators of other platforms (Aventus, Robocash, Viasms).

My overall amount in troubled LOs, including pending payments, decreased a bit and is circa € 1k, i.e 12.6% of my portfolio. This is due to repayments from Varks, I recovered about 26% of my outstanding since they loss their license. The Ukrainian entities announced in August they will wind down their operations. This is the all Finko group (Varks being the Armenian entity) that is basically stopping its activity and around € 35 millions of outstanding at risk for investors on Mintos. They keep servicing the loans and collect repayment to try covering their debts.

Besides Varks, I am mostly concerned by Capital Service which proposed a repayment plan to investors requesting a 40% haircut on the principal and to recover the 60% remaining over a period of 8 years with a 2 years grace period… Mintos organised a vote that ended with only 3% of investors agreeing to the terms (I refused). Negotiation are still on-going between CS and Mintos. Let’s hope for something more acceptable to most investors!

Mintos published an update regarding the license they applied for. One important thing that caught my eyes is that we will be investing in credit notes linked to the loans and not into the loans directly afterwards. The way I understand it is that the direct investment structure might not exist anymore. I believe more details, and explanations, are needed in that regards.

If you don’t already invest in Mintos, and want to give it a try, feel free to register using my link . It would help the blog 🙂

Robocash

My returns on Robocash jumped in August since a bunch of 3 months loans I bought when joining the platform reached maturity. Therefore my monthly XIRR skyrocketed to over 34%, nice!

Robocash published its financial accounts for 2019. The platform published a summary certified by KPMG as being faithful to the full audited financial accounts. When asking I got the reply that the full accounts are confidential until Robocash will be listed on the Australian Securities Exchange (planed for December).

Subsequently to the publication, Robocash announced that interest rate will return to 12%, like pre-corona virus time, from 1st September. I had just made a first deposit of € 900 locked into 3 months loans the day before… and therefore decided to add another € 1k to lock it into 1 year Singapor loans at 14% just before the drop in interest rates. Of course it will mean a lower XIRR for the next months since those loans are full bullet but i am not relying on the monthly cash flow and can therefore be patient to cash in more interests overall.

As previously mentioned, the main reason for me to open an account on Robocash is the strength of the loan originator. The results for 2019 confirms this with $ 15.8 millions profits, i.e 12% net profitability. In terms of financial structure, Robocash group is also pretty sound with own funds of $ 37.8 millions representing 62% of the total balance sheet for $ 7.76 millions of financial debts (without further details in the summary). Most of the past years profits have been kept within the group.

Robocash is now the LO i have the higher exposure to.

You can use my link to sign up on Robo.cash and start earning 14% interests on all loans with BBG and group guarantee.

Peerberry

Peerberry keeps working well. I entirely invest manually haven’t noticed any cash drag in August, at the end of the months the number of loans available increased. The filters for manual investing have been updated which I find now more convenient. I am still missing a filter to select the group LO directly instead of each lender. The interest rates remain at same level, mostly 9-10.5% for short term loans on top of which I luckily benefit from a 1.5% temporary bonus for 1 year.

I am investing in both Aventus (80-85%) and Gofingo (15-20%) groups. I have no more exposure to Lithome and did not pick loans from the newcomer on the platform SIB Group. I have nothing against them but I already invest in real estate loans in Lithuania through Estateguru so I prefer to focus on the 2 more established LOs of the platform.

The statistics page has been updated and provide with more information on the loan book per LO.

You can use my link and receive a bonus between 1% and 2% depending on the amount invested during 30 days. I will get the same bonus.

Viainvest

The platform is working well and my returns are more than matching the 12% advertised. I decided to invest an additional € 500 in August while I am still waiting for the publication of the audited financial accounts. Viainvest mentioned needing more time to get the proper signatures since the covid-19 crisis has delayed audit work differently in the different countries. Considering all the issues with Polish LOs on the different platform I decided to exclude the Polish entity for the time being. I had not noticed any issue but I prefer to be on the safe side. My autoinvest has been mostly picking up loans from Sweden and Latvia anyway, only about 10% were from Poland.

As mentioned before, the main reasons for joining this platform are the strength of the loan originator, the simplicity of the platform and the uniform and rather stable interest rate (12% now, it was 11% before the covid-19 crisis).

If you want to give a try to Viainvest feel free to register using my link. We will both get a bonus of €15 after you invest at least €50 during the first 30 days.

Estateguru

On Estateguru I keep reinvesting whenever I have at least €50 free cash on the account. I have only little number of loans with delays.

Estateguru is slightly below my new rule of € 2k minimum investment per platform but I intend to keep it that way for the foreseeable future.

If you want to give a try to Estateguru feel free to register using my link. We will both get a bonus of 0.5% for 3 month on all investments you will make on the primary market.

Evoestate

I added Evoestate to my portfolio in August. I have had my eyes on this platform for a while.

Evoestate is a real estate crowdfunding aggregator offering currently deals opportunities from 18 real estate platforms coming from 13 different countries. Investors have access to all kind of real estate investments: buy-to-let, fixed-interests development loans, profit-participation (= equity) loans in one place.

I like the principle to have access to so many offers at the same place, overcoming the language issue with summary in English. In addition many real estate platforms do not propose a free secondary market and/or have a high minimum investment amount of € 500 or € 1k. Investing through evoestate allows to invest as little as €50 and to have access to a free of charge secondary market.

I have already invested in 19 different projects from 11 different platforms in deals from 8 different countries. I have now real estate investments in new countries previously absent of my portfolio like Austria, Germany, Italy, Spain and Ireland.

If you want to give a try to Evoestate feel free to register using my link. We will both get a bonus of 0.5% for 6 months on all investments you will make on the primary market.

Viventor

I keep reducing my exposure on Viventor as I consider the loan originators as smaller and potentially weaker. Considering the number of loan originators facing difficulties I think this is the right decision that I took already since end of March. Here is a short update:

Aforti: Viventor provided update on Aforti Factor. The legal action enabled to retrieve 15% of the outstanding so far. Let’s hope for more in the coming months and that also Aforti Finance will be concerned (I have loans of Aforti Finance only).

Twinero/Presto: due diligences are on going in order to have a better view on how to proceed regarding repayment schedule. There is still the possibility that Viventor takes over the loan portfolio to conduct the collection activity.

CbC: On 18 August, Viventor decided to suspend CbC from both primary and secondary market for failing to make settlements since the 6th of July. CbC has been unresponsive despite several communication attempts from Viventor. Court proceeding have been initiated by Viventor. To my knowledge similar situation is on-going on Iuvo platform with the same loan originator. I have tried to sell my loans at a discount in the days before the suspension since I was aware of Iuvo starting legal actions against this loan originator. I was unfortunately unsuccessful.

If you to give a try to Viventor you can use my link to sign up. It would help the blog as I would receive €5 and 1% of your investments during 30 days as a publisher. Unfortunately Viventor stopped the previous refer a friend program and there is currently no bonus for new investors.

TFG Crowd

As I mentioned already, I am waiting for the maturity of my 2 loans to exit the platform. I am winding down P2B in my portfolio.

My first loan was repaid on 2nd September and I withdrew the amount from the platform. Now it remains 1 loan with maturity beginning October and I could be out afterwards.

Swaper

As explained previously, despite the platform has been working well for me, I decided to leave the platform for lack of transparency. In particular the absence of audited financial account for both the platform and the LO Wandoo Finance. In addition, the buyback guarantee is enforced by the platform which I do not like.

I am still waiting to receive the accrued interests of 3 sold loans when they will be finished in September.

If you want to give a try to Swaper you can signup using my link. Investor using my link will get the loyalty bonus of 2% as from first investment for 3 months (all loans at 16%). I would get € 5 which would help supporting the blog.

Write-off, Defaulted and Watchlist exposures

Since the portfolio update of January, I included this category in order to flag my investments at high risks within my portfolio.

Write-off exposures = € 5,375 (outside of the portfolio)

This include the overall balance of Monethera and Grupeer at the time they announced stopping their activities. I still hope I could recover part of it through legal actions but this will take a long time and the outcome is very uncertain. The loss in capital is € 5,100 and in interests € 275. I joined both lawsuits but I cannot say more about those procedures as it is confidential for obvious reasons.

Defaulted exposures = € 865 (1.62% of the portfolio)

The main criteria used to classify an exposure as defaulted is being over 90 days past due. Exposures in defaults do not mean that recovery are impossible but that the likeliness of losses is high.

It includes my exposures to troubled LOs in Viventor (Aforti (€ 34), Twinero/Presto (€ 291), CbC (€ 33) and MyCredit (€ 30)) and Mintos (Capital Service with € 477 since it has not repaid anything and proposed a 40% haircut).

Watchlist exposures = € 1,720 (3.2% of the portfolio)

It includes my investments in TFG Crowd (€ 200), my investments still under negotiation with the borrowers on Wiseed (€ 1,000) and my exposures to troubled loan originators on Mintos: Varks (€ 505) and Dziesiatka ( 15), those figures include pending payments. Both Varks and Dziesiatka have made regular repayments since their suspension.

What’s coming for my portfolio?

I listed last month my main objective / to do list for the upcoming months. Have I changed my mind? See below:

  • I plan to leave Viventor, Swaper and TFG Crowd => I confirm and decreased in particular Viventor in August.
  • I’ll have have a look at the audited financial accounts of both Robocash group and Viasms groups before investing more on the last 2 platforms that joined my portfolio => I have made € 1.9k deposit on Robocash following the publication of the financial accounts. Still waiting for Viainvest.
  • No plan to reinvest in business loans in the current economic context and probably for the upcoming year. => I confirm
  • I keep looking at potential new platforms but there is no rush in my mind => I opened Evoestate and invested in multiple deals already.

There is no change in my plan for the upcoming months and will stick to the above mentioned points.

That is all for this portfolio update! If you have any comment don’t hesitate. 😊

Cheers!

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