This article sets out the key steps if you’re looking to buy an investment on the marketplace, and some useful things to be aware of. If you’re looking to sell an investment, you can find a quick guide to selling here.
Browsing available investments
On the marketplace, you can see the investments that existing investors are looking to sell. You can choose to browse the investments by the impact the investments are having, or filter by the financial terms of the investments for sale. If you want to see all of the investments for sale then you can do that too.
When browsing the marketplace, you’ll see the following key information for each investment:
Investment status - the current status of the investment, such as whether it is on track with its payments or currently behind. Learn more here.
The name of the investment
The impact sector(s) for the investment
The original return of this investment, if you invested when it started. This might be higher or lower than the estimated return for the buyer, depending on the price set by people looking to sell. Remember that investments with higher returns typically have higher risks.
The type of return structure for this investment. Most of the investments on Abundance have fixed returns, however there are some investments with different structures.
The estimated effective return, shown as an IRR, a buyer would receive, based on the price each seller is looking to receive for their investment. If different sellers are looking to sell at different prices, you’ll see a range rather than a single figure. You can find out more about how the price relates to the effective return for a buyer here.
The term remaining on the investment before it is fully repaid.
A short summary of the impact of this investment.
The number of people selling this investment, and the total amount of the investment currently up for sale.
Choosing an investment
Once you select an investment on the marketplace, you’ll be able to view more detailed information, including:
A description of the investment and the company or council behind it
The latest updates from the company or council about the investment
The key facts about the investment, such as the original return and the start date
The Factsheet for the investment
The sale history for the investment, where you will find data on how much of the investment has previously been sold, and at what prices.
If you’re interested in buying the investment, the next step is to view offers to sell the investment.
There may be more than one investor looking to sell a particular investment. The investors might be selling different amounts of the investment and they may also be selling at different prices.
You can see how much you’ll need to pay based on the price set by the seller, and the amount you are expected to get back by the end of the investment term. You’ll also see what your estimated effective return would be based on the price, shown as an Internal Rate of Return (IRR). The higher the price the seller wants, the lower your estimated effective return will be as you’ll have to pay (i.e invest) more to get the same amount back. Your effective rate of return may be higher or lower than the original rate of return on the investment when it launched - you can learn more about the pricing of investments here and about IRRs here.
If you View a particular offer, you’ll be able to see the full breakdown of what you can expect to receive back and when. Remember, as with any investment, there are risks, and the returns from the investment are not guaranteed.
Buying an investment
If you’ve found an investment you’re interested in and chosen an offer you’d like to buy, you can follow the steps to buy the investment from the seller.
You’ll need to deposit money to your Abundance account, unless you already have cash in your portfolio, to pay for the investment. This amount will be reserved in your Abundance account and the investment will be removed from the marketplace while you agree a sale with the seller.
We will send an email copying in both you and the seller, inviting you both to agree a sale. If you are happy to proceed, both of you will need to ‘reply all’ to the email with your agreement. This email step is required before we can complete the trade - you can find out more about why this is required here.
Once we’ve received notice of your agreement, Abundance will administer the trade for you, transferring the investment into your Abundance account and the money to the seller’s account.
If we do not receive notice of an agreement within 3 full working days, the money reserved for your purchase will be released back to you, and the seller will be able to put the investment back up for sale. This is to ensure your money is not tied up if an agreement is not reached with the seller for whatever reason.
You can find a quick guide on how to sell an investment on the marketplace here.
Quoted returns are no guarantee of future returns and past performance is not a guide to future performance. Your ability to sell an investment and the price you receive will depend on whether there is an interested buyer and how much they are willing to pay. As with any investment product there are risks. Part or all of your original invested capital may be at risk and any return on your investment depends on the ability of the company or local authority that issued the investment to pay your returns.