Growth Street review
Growth Street is an interesting P2P platform that has been around since 2016. It is still quite small (£32m sized portfolio as of June 2019) but it has several strong backers and seems to have been focused on being careful in managing its portfolio well and developing a long term sustainable strategy. Growth Street competes against Funding Circle and RateSetter. It has an unusual structure for its loans – all loans are 30 days which are then ‘rolled over’ at the end of this period. This structure means that investors can sell their entire investment within a 30 day period. An interesting feature of Growth Street’s platform is that investors cannot select individual loans, they instead receive exposure across all loans. A protection fund exists which is designed to cover losses from company defaults. The protection fund is currently well funded versus Growth Street’s 12 month expected loss estimates, but this is something that investors should monitor. Growth Street claims to make use of ‘Advanced Data Integration’ which is designed to provide real-time access to the banking and accounting records of its borrowers, and spot emerging risks. Growth Street has only been lending since 2014, but its lending record to date has been strong, with only 10 defaults (as at June 2019) which represents a cumulative default rate of approximately 1.2% on funds lent to date. This is lower than the 3-4% rate we would have expected to date. We think that Growth Street best suits investors who are looking for a simple investment product, with a stable return, that does not require much or any time to manage, is liquid, and has some loss protection features. We think the returns and risk profiles compares favourably against similar UK P2P sites such as Funding Circle and Ratesetter.
Growth Street is offering investors one of the largest signup bonuses available anywhere currently for new investors. New investors receive a £200 bonus, for anyone investing at least £2,000 for a 12 month period. This represents an expected return of 14.3% for anyone investing £2,000 in their first year of investment. Further details can be found here.