South: MarketInvoice outperforms rival peer-to-peer lenders

Business finance company MarketInvoice has outperformed fellow peer-to-peer lenders achieving three-year net returns of 30.2% for investors. In 2017, MarketInvoice generated 10% annualised net return for investors to Q3.

These net returns are calculated using AltFi’s proprietary ‘Uniform Vintage Portfolio Analysis Methodology’ that assumes an investor invests an equal sized investment into each monthly cohort of origination, and this investment is perfectly diversified across all loans originated in that period. MarketInvoice has a diverse base of investors and not all investors earn similar returns because of differences in risk tolerance.

Aman Mehra, head of investor development at MarketInvoice, commented: “As MarketInvoice matures as a platform, we continue to make significant investments in our Risk function that include further strengthening our risk methodology, credit models and processes. These have been the primary driver of the return outperformance at MarketInvoice.

“Despite the political and financial uncertainty this year, the short-dated and secured nature of our invoice financing product has allowed us to be responsive and closely monitor our credit performance, resulting in greater than expected returns for our investor base. Additionally, our net returns¹ over a three-year period have outperformed the Alt-Fi UK Index, reinforcing the fact that invoice financing is a long-term viable asset class to invest in.

“As we grow our investment product portfolio to cater for a wider range of businesses, we continue to see strong appetite from HNWs and Institutions.”

MarketInvoice has been attracting interest from high-net-worth individuals (HNWs) since starting in 2011 and more recently has secured institutional investors including Banco BNI Europa (£45m) and Varengold Bank AG (£45m).

In 2017, MarketInvoice launched two new products which have attracted interest from HNWs and Institutions alike. The Confidential Invoice Discounting facility was launched in February and a Business Loans solution was launched in November, both sit alongside a Selective Invoice Finance service which was the initial service offer at MarketInvoice since 2011. With these launches, MarketInvoice has further diversified its investment offerings by creating additional alternative finance opportunities to cater to investors with different risk appetites.

Since 2011, MarketInvoice has advanced more than £1.7 billion to UK businesses through invoice finance and business loans. This funding has come from a combination of sophisticated investors and institutions such as banks and asset managers.