Peer-to-peer platform Assetz Capital has closed to investment from individual investors today.
The platform confirmed that its retail platform is now in ‘run-off’ and will over time return capital to investors.
A statement on its website reads: “Over the last year we have finally seen sharp and substantial rises in bank interest rates after well over ten years of them languishing at near zero levels.
“This has led to the Access Accounts and our other products becoming less competitive than they were versus rates offered for some bank savings products.
“We recently raised the rates on the Access Accounts and initially saw healthy net inflows of capital. However, after continued bank interest rate rises, retail investors were withdrawing capital on a net weekly basis.
“In our last e-mail, we said that we would consider ways to provide our investors with immediate access to the higher interest rates provided by our more recent lending activity. Whilst these more recently originated, higher interest rate loans (often 7% or more) are available today in the Manual Lending Account, we know that manually selecting loans for investment is not for everyone and have not seen high enough levels of demand for those loans.
“We also looked at the potential for a new higher interest automated account, or an easy auto-invest process applied to the Manual Lending Account. We also polled our investors to add this feedback to our thinking on the retail investment part of our business. Unfortunately, we did not see substantial demand for a new higher interest rate account as a result of that poll. We also reviewed the wider market and saw that there were no substantial levels of net new investment taking place elsewhere in the peer-to-peer space.
“As a result, we have reluctantly made the decision to close the retail platform and conduct a solvent run-off of the retail loan book.”
Assetz Capital said it will now become a 100% institutionally funded lender as it looks to support the housebuilding and care industries.
Since early 2020 around 80% of all Assetz Capital’s lending has been institutionally funded.
The lender has notified the FCA of its intentions.
