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TAKE A SIPP
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BRIDGING THE GAP
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SoMo’s Simon Cottrell talks to P2PFN
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P2P investing stands out in record year for alternatives ISSUE 75 | NOVEMBER 2022
PEER-TO-PEER lending is standing out amongst alternative investments as it offers more transparency, taps a growing market and sets to benefit from higher interest rates. The P2P lending market is expected to grow significantly to be valued at $1.14trn
(£1trn) by 2031 globally, according to Transparency Market Research. As the investment opportunity grows, it is also important to consider what it offers investors. Research from Peer2Peer Finance News earlier this year found that Innovative Finance ISAs (IFISAs) returned
an average of 9.01 per cent over 2021. It has managed to deliver stable returns through difficult economic conditions. In addition, the asset class is seen as offering a greater level or transparency than some other alternative asset classes such as private equity or hedge
ROLLING ONE-YEAR HORIZON IRR FOR REAL ESTATE FUNDS BY TYPE 30% 25% 20% 15% 10% 5% 0%
2016
2017
2018
2019
2020
2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 All real estate
Value-add
Opportunistic Source: PitchBook
funds, even though these might have the chance for greater rewards, albeit with more risk. “The problem with whisky and arts, as it is with most alternative asset classes, is finding the data and information you need to assess whether it’s a good opportunity or not,” said Neil Faulkner, chief executive and head of research at P2P ratings firm 4thWay. “It is one of the reasons P2P lending stands out. “P2P is an unusual, innovative idea in that it is so transparent and you can measure it so much more easily than most other alternative investments or innovations in investing.” He added that the vast majority of P2P investors have enjoyed stable returns through the years, proving that the sector can offer investors value. Peer2Peer Finance News’ research found >> 4