What happens if a loan goes into default in Auto Invest / IFISA Pool?

If one or more of the loans in the pool were to go into default.

Investment Recovery Process in Auto Pool

    • Blended Investment Allocation Strategy:

      Our Auto Pool employs a Blended Investment Allocation strategy, aiming to diversify investor portfolios across both current (active) and defaulted loans. This approach is designed to balance potential risks and rewards, offering exposure to both the stable returns of current and defaulted loans.
    • Return of Funds:
      • All invested funds, alongside accrued interest, are scheduled for return at the investment end date, regardless of the performance status of loans within the Auto Pool. This includes investments in both current (active) and defaulted loans, aiming to provide investors with returns that are commensurate with their investment rate, whilst acknowledging that all investments carry a degree of risk and returns cannot be guaranteed.
    • Recovery Efforts:
      • In the event of a loan default within the Auto Pool, we initiate recovery efforts aimed at maximising the return to investors. This may involve renegotiation with the borrower to return the loan to a performing status or the realisation of collateral.
      • Recovery proceeds, after covering all associated costs, will contribute to aiming to provide investors with returns that are commensurate with their investment rate, whilst acknowledging that all investments carry a degree of risk and returns cannot be guaranteed. The timing and success of these efforts may vary, influencing the overall performance of the Auto pool.
  • Risk Acknowledgment:
    Investors participating in the Blended Investment Allocation strategy acknowledge the inherent risks, including the potential for partial or total loss of capital invested in defaulted loans. The diversified investment approach is designed to mitigate these risks by spreading investments across different loan types.

  • Investment Philosophy and Diversification:
    This strategy leverages the diversified nature of investments within the Auto Pool to balance risk and reward. By investing in a mix of defaulted and current loans, investors can benefit from still receiving returns throughout the investment term despite the loan performance status.

  • Adverse Circumstances:
    In the event of adverse circumstances affecting the recovery of funds from defaulted loans, we will undertake all reasonable efforts to release the invested funds. The return of these funds depends on the outcomes of the recovery processes and the recoverable value of the associated assets.

To date, our investors have not had any losses as a result of defaults.* (29th February 2024)

Lender/Investor Risk Warning

* Don't invest unless you're prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

 ✝ Gross annual interest equivalent rate – FAQ Link