Register for FREE and INSTANT ACCESS to the Debt Based Securities Report

  • Get an understanding of the Debt Based Securities investment types available and their regulatory standing
  • Evaluate the risks in varying market conditions
  • Discover the Debt Based Securities tax wrapper options with SIPPs and the new Innovative Finance ISA
  • Get an overview of the current fees and returns that may apply to a Debt Based Securities investment
  • Consider the differentiators and similarities between Debt Based Securities and peer to peer lending
  • Understand the main due diligence issues to take into account when looking at Debt Based Securities
  • Earn up to 4 hours of CPD from the CISI, CII and PFS

What are Debt Based Securities?

Debt based securities are investment offerings to individuals in the form of corporate debt, generally issued by small and medium sized enterprises looking to raise less than €5 million in a single issue. The investor buys the debt in the form of an unlisted debenture at an agreed return. They have been brought to a wide audience by crowdfunding platforms and are governed by the FCA’s investment based crowdfunding regulations. As well as tax benefits, DBS that can be held within an IFISA also require greater consumer protections including the involvement of an FCA authorised platform which treats the investor as its client.


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Brief Overview

At a time of low interest rates, yields from Debt Based Securities can be impressive with more risk mitigators than some are aware of, including asset backing, access to more mature borrowers than P2P lending typically offers and government support. Debt Based Securities still promise targeted and potentially lucrative investment into the UK’s needy SME sector. The structure can also allow investors transparency and engagement not found in other asset classes, as well as routes to underlying assets not previously available to small private and retail investors. Tax wrappers in the form of SIPPs and the newly available Innovative Finance ISA are also a great reason for advisers to become more familiar with investing in DBS.

What people are saying about Debt Based Securities

Comments from industry participants

Sponsors

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Abundance Generation

Alternative Finance

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Founded in 2009 by a small team of experts in finance, sustainability and technology, Abundance focuses on investments that build a better world and launched its first bond investment in 2012.   From November 2016, all investments issued via the platform can be included in the Abundance ISA and Abundance Pension.

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Downing LLP

Tax Efficient

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Downing is a long-established, FCA-authorised investment manager, that brings over 20 years’ investment experience to debt-based crowdfunding.  The Downing Crowd platform was launched in March 2016 and Downing Crowd Bonds connect investors with asset rich businesses, offering security over those assets and competitive returns.  UK investors can also earn tax-free interest with the Downing Crowd Innovative Finance ISA.

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Goji

Tax Efficient

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Funded in 2015 by qualified professionals and risk management experts, Goji is a specialist investment manager that offers investors and intermediaries access to carefully constructed portfolios of direct lending opportunities originated over UK lending platforms.  The Goji Bond aims to provide an IFISA eligible uncorrelated return, higher than those available on cash but less volatile than traditional fixed income investments like listed bonds.

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Rockpool

Tax Efficient

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Set up five years ago, Rockpool has attracted £250m from private investors, using a mix of EIS equity and debt-based offerings to fund Rockpool targets profitable and asset-rich businesses with a sustainable competitive advantage and strong management. One of its range of routes to investment is loan notes with asset security.

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Triple Point

Tax Efficient

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Triple Point is a specialist successful, private partnership founded in 2004. Triple Point aims to deliver well researched and managed investments to individuals who are seeking capital security, liquidity and predictable returns across a range of products including VCTs, EISs, Secured Bonds and Estate Planning solutions. The company is also HMRC approved as an IFISA manager.

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Property Crowd

Tax Efficient

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Property Crowd is part of Global Alternatives and as an independent owner and operator of cross-border marketplaces, Global Alternatives works with industry leaders that have proven credibility and track records – as rightly expected by professional investors.   With a clear modus operandi in the realm of private securities and alternative investments, their initial focus is on the world’s largest, yet least evolved asset class: real estate.

Thanks to Gillian Roche-Saunders at Bates Wells Braithwaite for compliance support
 

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