FAQ

General, for Members and for Originators.

What is P2P investing?

Peer-to-peer (“P2P”) investing is the process of lending to or investing in professional businesses through a platform (which in many cases is an electronic system) that matches investors directly with investees.

What is the main problem with P2P investing?

We all want to generate attractive returns with our savings and investments, irrespective of how small our savings pot is. However, unless you’re rich enough to be served by a suite of private bankers, you end up facing the following problems: 

  1. Whilst there is a plethora of possible investments available (crowdfunding, lending platforms, offline via brokers etc.), nobody you trust is able to tell you which borrower or investee is a crook! 
  2. You can never really be sure whether the borrower or investee will pay you what you are owed. Even P2P platforms can only pay you when they are repaid by the investee.  If the investee makes off with your funds, commits fraud or just manages the money raised badly, there is nothing the platform can do. 
  3. The frauds, bankruptcies and insolvencies in this sector over the past 3 years have proven that many times over. However, those who invested in or lent to people they have dealt with and trusted within their network have had minimal issues.
  4. Investing is time consuming! You need to read a lot of documents yourself and for smaller deals it makes no sense to get legal advice on whether the documents you need to sign will provide you with sufficient protections on your investment; 
  5. Even if your investments are real, they are illiquid. There is little or no possibility to exit/sell if you suddenly need cash for yourself; 
  6. You don’t have a centralised place where you can see all of your investments, with a fair value calculated at all time, reflecting the true value of your investments, as well as a risk assessment of your individual investments and portfolio as a whole.  

What is the solution?

Club Deals are the solution to the issues that have plagued P2P investing

What are Club Deals?

Club Deals are the oldest form of investment. They are investments made with a known group of co-investors (“Club”) in a transaction that is not widely sold to the market. The investee is normally known to one of the members of the Club, who vouches for the integrity of the investee. The members of the Club just need to worry about the transaction making economic sense for our personal investment parameters, not about fraud and acts committed in bad faith. This is because the investee normally has a personal relationship outside of the deal with one or more members of the Club and that relationship is a disincentive to fraud.

What is the problem with Club Deals?

The main problem with Club Deals is ongoing deal administration. Investors in a Club Deal have ongoing careers and professional occupations and normally one member performs all the actions for free (or a small, competitive fee). However, given the private, closed nature of such transactions the ongoing administration is painful.

What is iHuddle?

iHuddle is a low cost, low effort Club Deal management and tracking platform that allows for relatively frictionless second market activity.

  • It allows YOU, as a small ticket investor to participate in transactions normally denied to you by teaming up with friends to access big ticket investments across a varied range of assets; 
  • It digitises each asset into Huddles. Each Huddle is worth £1 and each asset, at inception is worth its purchase price in Huddles. For example:

    a. Five of you invest in a property worth £100,000.

    b. Each of you invests £20,000

    c. The property is digitised into 100,000 Huddles worth £1 each and each of you will own 20,000 Huddles worth £1 each.

    d. The market value of each Huddle (which started at £1 when the transaction was completed) will change over time as the property goes up in value.

    e. If you need cash, you don’t need to sell the property and incur transaction costs – you can just sell as many Huddles as you need to your co-investors or third parties for whatever price you think is fair.

    f. The sale can happen at a click - you don’t need to sign any complicated documents. 

    g. Fraction ownership and liquidity!
  • The investments are originated and shown to you by your trusted friends and those in your social network; 
  • Your cash will be custodied by a trusted provider and your entire investing network will sign the same standardised documents for each particular Club Deal. 
  • You can see all your investments and get an immediate overview of your risk adjusted return;

How do I register?

  • Sign up on the website www.ihuddle.io.
  • Enter your name, email address and password.
  • We will send you an email which will require confirming your email address by clicking on a link.
  • Once you click on that and activate your account by confirming your email address, we will ask you to login and complete your registration. This will involve you telling us what kind of investor you are and providing standard KYC information.
  • We are going to be collecting your money for Club Deals and providing you returns from underlying investments so KYC is important!
  • We will approve your KYC quickly and onboard you. You will be informed on email and  you can log on and start investing in Club Deals!

What sort of investor am I?

SOPHISTICATED INVESTOR

You have previously invested in more than one unlisted company, or have been a Director of a company with annual turnover of £1 million or more, or have been a member of a Business Angels network for the last six months, or worked in Private Equity in the last two years. 

You will need to self certify the following statement:

Sophisticated Investor Statement

I declare that I am a sophisticated investor for the purposes of the restriction on promotion of non-readily realisable securities. I understand that this means:

  • I can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in non-readily realisable securities;
  • The investments to which the promotions will relate may expose me to a significant risk of losing all of the investment.
  • I am a sophisticated investor because at least one of the following applies:

    a. I have made more than one investment in an unlisted company in the two years prior to the date below;

    b. I am a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date below;

    c. I am working, or have worked in the two years prior to the date below, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises;

    d. I am currently, or have been in the two years prior to the date below, a director of a company with an annual turnover of at least £1 million.

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me to seek advice from an authorised person who specialises in advising on non-readily realisable securities.

HIGH NET WORTH INVESTOR

You have earnings of more than £100,000 per annum or hold assets of at least £250,000.

High Net Worth Investor Statement

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-readily realisable securities. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

  • I had an annual income to the value of £100,000 or more throughout the financial year immediately preceding the date below or;
  • I held net assets to the value of £250,000 or more throughout the financial year immediately preceding the date below.
  • Net assets for these purposes do not include the property which is my primary residence or any money raised through a loan secured on that property; any rights of mine under a qualifying contract of insurance; or any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled.

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me to seek advice from an authorised person who specialises in advising on non-readily realisable securities.

INVESTMENT PROFESSIONAL

You have professional experience in matters relating to investments, because you are either an authorised person, or an exempt person engaged in a controlled activity which is a regulated activity, or a person whose ordinary activities involve carrying on the controlled activity to which the communication relates, or you act on behalf of and as an authorised representative of a government, local authority (whether in the United Kingdom or elsewhere) or an international organisation.

HIGH NET WORTH INVESTOR

You have earnings of more than £100,000 per annum or hold assets of at least £250,000.

Investment Professional Statement

I declare that I am an Investment Professional for the purposes of the restriction on promotion of non-readily realisable securities. I understand that this means:

  • I can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in non-readily realisable securities;
  • The investments to which the promotions will relate may expose me to a significant risk of losing all of the property invested.
  • I am an Investment Professional because at least one of the following applies:

    a. I am an authorised person;

    b. I am an exempt person where the communication relates to a controlled activity which is a regulated activity in relation to which the person is exempt;

    c. I am a person whose ordinary activities involve me in carrying on the controlled activity to which the communication relates for the purpose of a business carried on by me, or from whom it is reasonable to expect will carry on such activity for the purposes of a business carried on by me;

    d. I act on behalf of and as an authorised representative of a government, local authority (whether in the United Kingdom or elsewhere) or an international organisation.

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me to seek advice from an authorised person who specialises in advising on non-readily realisable securities.

HIGH NET WORTH COMPANY

You represent either a body corporate which has, or which is a member of the same group as an undertaking which has, a called-up share capital or net assets of not less than £500,000, if the body corporate has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, or otherwise £5 million, or an unincorporated association or partnership which has net assets of not less than £5 million, or you are the trustee of a high value trust, whose aggregate value of the cash and liabilities is £10 million or more, or has been £10 million or more at any time during the financial year immediately preceding the date below.

High Net Worth Company Statement

I declare that I act on behalf of and as an authorised representative of a High Net Worth Company for the purposes of the restriction on promotion of non-readily realisable securities. I understand that this means:

  • I can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in non-readily realisable securities;
  • The investments to which the promotions will relate may expose me to a significant risk of losing all of the property invested.
  • The High Net Worth Company I represent falls under at least one of the following categories:

    a. any body corporate which has, or which is a member of the same group as an undertaking which has, a called-up share capital or net assets of not less than, if the body corporate has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, £500,000, or otherwise, £5 million;

    b. any unincorporated association or partnership which has net assets of not less than £5 million;

    c. the trustee of a high value trust, whose aggregrate value of the cash and liabilities is £10 million or more, or has been £10 million or more at anytime during the financial year immediately preceding the date below;

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me to seek advice from an authorised person who specialises in advising on non-readily realisable securities.

How do I invest?

Once you log into the portal you will see the following sections on the home screen.

Invitations

Specific deals where members of your Club have originated deals and have invited you because you have a history of investing together. Alternatively, it may be your first investment in this particular Club but you are aware of and will have known about the Club Deal in advance.

Open Deals

These are deals which have been originated by your Club and by other Clubs. You will have an opportunity to invest in those as well should you so wish.

My Investments

These show the Club Deals you have invested in or committed to invest in.

My Originations

This section shows Club Deals that you have originated and put on the platform so that members of your Club (or another Club that finds your deal attractive) can invest in.

Secondary Market

This section shows all Club Deals that have been put on the secondary market.

My Bids

This section shows bids made by you in the Secondary Market.

My Offers

This section shows offers made for your deals by other members once you put your deal on the Secondary Market.

If you wish to invest in a deal you must first load cash on to your account by depositing funds. Currently funds are deposited offline. Email us at contact@ihuddle.io and we will call you to talk you through the process. Once you have deposited cash, we will update your Available funds on the platform and you will be able to invest. The moment you invest, your Available funds balance will reduce and your Committed funds will go up by the corresponding amount. If the deal closes then your Committed funds will be used to invest in the Club Deal. If the Club Deal does not close we will transfer the funds back to Available funds.

How much will it cost me to join the Huddle?

Joining is absolutely free. Come on board and have a look at what the other Private Clubs are doing. If you want, you can co-invest with them (provided they are open to the idea).Once you do invest, we will charge you 5 basis points (yes, that is only 0.05%) per calendar month of the value of your share of the underlying investment. For that, we will collect the cash as it comes in from the investee, pass your share back to you and make sure you are able to view your positions.

If you find a transaction or Club Deal that you want to invest in through iHUDDLE i.e. not one that an Originator in your Club has brought to you, then we will charge you an origination fee of 5% of your total yield.

If you want to sell your part or all of your trust interest, we will charge you 1% of the value of your sale. Therefore, if you own 1/10th of an asset worth £100, and only wish to sell half of your holding for £5, we will charge you £0.50. For that, we will execute the sale, collect the proceeds from the buyer, transfer your funds to you and reflect the updated ownership via the trustee on the iHUDDLE platform.

How is my ownership reflected?

The beauty of our platform and the trust structure is that your displayed percentage ownership on the My Investments page is your beneficial ownership of the investment (which is held in trust for you by the trustee). 

When you sell all or part of your investment in iHUDDLE by putting it on the secondary market, the buyer will assume beneficial ownership and it will be reflected on their displayed percentage when they log in. Your displayed percentage will reduce accordingly.

What is an Originator?

An Originator is the one member of an investment club who has the ability to source Club Deals and who the other members trust (every group of friends has one person like this!). Normally the originator finds the deal, gets the other members to match his or her investment and administers the deal for everybody.

How can an Originator Huddle?

We take all the headache out of administering a deal. An Originator can put a Club Deal on the iHUDDLE platform, and can invite the other members of his or her investment club to participate in the Club Deal. When the other members log in, they see the Club Deal in My Invitations.

How much will we charge an Originator to Huddle?

We will only take 10% of any finders fee or arrangement fee that an Originator charges his investees or investors for finding Club Deals for them.

If however, we bring investors to an Originator’s Club Deal, we will take 50% of the the Originators finders fee or arrangement fee (proportionate to the investment made by the investors we have brought).

What will we do on an ongoing basis?

We will monitor the cash-flows associated with each Club Deal. When the cash-flows come in, we allocate them proportionately to each investor in your Club Deal and pass the cash-flows on.

If an investee is delinquent or late in paying, we will let you know and will wait on instruction from you and the other investors to begin collection actions.