Triple Point Income Service

Fixed-term, fixed-interest, secured bonds – up to 6.43% AER (not guaranteed)

IMPORTANT: You could lose all of your money invested in the product. This is a high-risk investment and is much riskier than a savings account. ISA eligibility does not guarantee returns or protect you from losses.

The Triple Point Income Service aims to offer investors access to fixed-rate bonds. These are issued  by Triple Point Advancr Leasing Plc (“TPAL”) – which provides loans and leases to small and medium sized enterprises across the UK – and secured against TPAL’s pool of lending assets. 

TPAL’s range of lending activities is diverse and includes secured lending, working capital loans, secured property finance, receivables finance and leasing. 

The income generated by these lending assets is used to pay bondholders’ interest. Any excess interest earned is ultimately accrued to Triple Point as the shareholder of TPAL, creating alignment of interest: Triple Point only gets paid once investors have been paid.

Investors can choose the term of the investment – 1, 2, or 3 years – and whether to have the interest paid monthly or in a single payment at maturity. 

Please note, this is a private lending investment service not a savings account and investor capital is at risk. The underlying investments are illiquid and could be difficult to sell. Therefore, in exceptional circumstances investors may find gaining access to their investments challenging. To date Triple Point has repaid over 500 bonds, all of which were paid in full and on time: note past performance is not a guide to the future. 

Triple Point is an accredited lender of the Coronavirus Business Interruption Loan Scheme.

Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice. The bonds are unlisted and not covered by the Financial Services Compensation Scheme. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value, so you could get back less than you invest.

Read important documents and apply

Highlights

  • 0.5% bonus for Wealth Club investors compared with going direct
  • Choose monthly interest or single payment at maturity
  • Invest as an individual or as a company
  • Available within an ISA for tax-free interest. Make a new subscription or transfer existing ISAs 
  • Secured against the lender’s assets – not individual loans
  • Attractive fee structure that aligns the interests of Triple Point with those of investors
  • Experienced manager with a strong track record 
  • Minimum investment £1,000
  • Current rates apply until 31 July 
  • You can apply online

Terms and rates (to 1 August 2020)

Term Monthly gross income Maturity gross income
1 year 5.25% APR 5.38% AER
2 years 5.75% APR 5.90% AER
3 years 6.25% APR 6.43% AER

This is an investment not a savings account: interest rates are not guaranteed, nor is your capital. AER is the Annual Equivalent Rate and illustrates what the interest rate would be if interest were to be paid and compounded once each year. APR is the Annual Percentage Rate and assumes no re-investment of monthly interest. Interest is paid gross if held in an ISA. Otherwise, 20% withholding tax will apply. Rates are inclusive of the 0.5% bonus.

IMPORTANT: You could lose all of your money invested in the product. This is a high-risk investment and is much riskier than a savings account. ISA eligibility does not guarantee returns or protect you from losses.

The manager

Triple Point Investment Management LLP was founded in 2004 and today manages more than £1.5 billion of private, institutional and public capital across four core areas: venture capital, energy and infrastructure, property and direct lending, leasing and private debt. 

Triple Point’s leasing and lending team manages in excess of £485  million across several mandates, including the Triple Point Income Service.  

The team has 25 fulltime employees and is overseen by the two managing partners, Ben Beaton and James Cranmer. Neil Richards, a partner of Triple Point and Head of Leasing and Lending with over 25 years’ experience in leasing and finance, leads the team which is supported by the wider resources of Triple Point Investment Management (over 120 people). 

The British Business Bank has approved Triple Point Investment Management as an accredited lender under the Coronavirus Business Interruption Loan Scheme (CBILS).  The scheme helps small and medium-sized businesses access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

Triple Point expects to both make new loans and refinance existing loans under the CBILS, so as to benefit from the protections it offers. Please note, Triple Point is permitted to undertake a set amount of lending under CBILS, but there are no guarantees it will use its CBILS accreditation when making loans within the Income Service. 

Investment strategy

Triple Point’s Income Service aims to generate a predictable, attractive fixed rate of return by providing funding to UK small and medium-sized enterprises. 

Investors in the income service invest in bonds currently issued by one company, Triple Point Advancr Leasing Plc (“TPAL”). TPAL uses the capital raised by issuing bonds to fund a diverse range of lending activities, arranged by Triple Point’s direct lending team. Lending activities include Secured Lending, Working Capital Loans, Secured Property Finance, Receivables Finance (which allows companies to unlock money tied up in invoices yet to be paid) and Leasing.

The bonds issued to investors are secured against TPAL’s assets. The income generated by TPAL’s assets is used to pay bondholders’ interest and any returns earned in excess of this amount is ultimately accrued to Triple Point as the sole shareholder of TPAL, creating an alignment of interest.

Portfolio

The TPAL loan book is £44.2 million in size (March 2020). There are currently more than 750 bondholders in the service. Since the service launched in May 2016, it has attracted £69.8 million from investors. 100% of bondholders have been paid on time and in full. This includes April and May 2020 following the COVID-19 outbreak: note past performance is not a guide to the future.

Source: Triple Point.

TPAL’s assets are currently invested in two ways: directly through its own loan and lease book, and indirectly, through three partnerships with Lendnet LLP, Telecom Capital Trading Partners LLP and ePayments Trading Partners LLP. 53%  of the net assets of TPAL is direct, secured lending, across a portfolio of 33 loans (as at March 2020). The largest loan accounts for 5.3% of the net assets of TPAL.  

TPAL’s bad debt provisions and reserves amount to 8.5%  of the value of the loan book. This is in part due to Triple Point’s decision not to withdraw earnings from the business. This creates an additional capital buffer to aid the preservation of exiting bondholders’ capital. Please note the level of reserves, the number of direct loans and sector exposures is subject to fluctuation. 

Secured loans

Opportunities in this area include providing senior secured finance (loans with debentures) to SMEs to fund growth, expansion, acquisitions and transactions such as management buy-outs and buy-ins. These loans range in value from £0.25m - £5m in size and are typically for one to five-year terms. Such loans are to established businesses that have a track record of profitability and are always secured by a first ranking debenture.

Working capital loans

A further opportunity is providing small working capital loans to SMEs, typically by issuing a business credit card. SMEs normally use this to purchase stock replacing their bank overdraft. The average loan is just over £4,500. Business credit cards are issued by TPAL’s origination partner who takes a first loss position in the event of default.

Leasing agreements

Leasing involves the financing of a wide range of business and service critical assets to SMEs for contract periods varying from two to five years, e.g. TPAL currently finances over 50,000 credit card terminals to SMEs. With an average deal size of £752 and support from TPAL’s origination partners, if the SME borrower ceases to trade or otherwise defaults in the first 12 months of the agreement, the financing of this asset class has provided consistent and predictable returns.

Access to your investment

Investors are committing their money for a set term and cannot liquidate investments early. 

Investors can request early repayment of capital, subject to a transfer fee, but the Service is under no obligation to accept that request. Partial repayments of capital are not permitted. In exceptional circumstances, due to the illiquid nature of the investments made by TPAL, it may also not be possible to redeem your bond on time at maturity. Investors should bear this in mind when deciding the amount and the term of the investment. 

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. 

These unlisted bonds are investments, not savings. Your capital is tied up for a fixed term. The bond investments made by Triple Point are not covered by the Financial Services Compensation Scheme: however, money held by Triple Point prior to investment may be covered by the FSCS.

The bonds are not readily realisable. They tend to be illiquid and hard to sell. They should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

Although the rate of interest is fixed at the outset of the loan, should TPAL run into difficulties it may not be able to repay your capital or make interest payments at the rate set or at all. 

Tax rules can change and benefits depend on circumstances.

Charges

Triple Point is remunerated from being the sole shareholder in the bond issuer, Triple Point Advancr Leasing plc. Bondholders should get paid first, then the profits within the company after tax provide Triple Point’s effective fee for the service. This means that, unless defaults are kept to a minimum, Triple Point doesn’t get paid, but it will benefit if the bond issuer does well, which aligns their interests with those of investors. Please see the provider's documents for more information on charges and fees.

0.65% of the total amount of capital raised by the issue of this speculative illiquid security will be paid out in costs, charges, commissions and other expenses to a third party. This is shown in the breakdown below, if applicable.

For every £100 you invest, £0.65p will be paid to third parties to meet costs, fees, charges and commissions.

Full initial charge
Bond transfer fee 1%
Annual management charge 0%
Performance fee 0%

More detail on the charges

Our view

The Triple Point Income service aims to provide investors with an attractive fixed rate of return of between 5.25% - 6.43% per annum through the issuance of bonds in TPAL. Since the service launched in May 2016, it has achieved its objective: it has repaid bondholders in full and on time. Although please note, past performance is no guide to future returns.

Investors in the service may find the way Triple Point is remunerated favourable. Triple Point does not charge management fees, instead, as the sole shareholder of TPAL, it is entitled to any profits after repaying bondholders. This creates a strong alignment of interest between investors and the investment manager.

Triple Point is a well resourced and experienced lender, as noted by the CBILS accreditation, and the service may therefore appeal to investors with adequate knowledge and experience of the risks involved in lending and leasing to SMEs. For experienced, income-seeking investors, the service could complement an existing balanced investment portfolio.

IMPORTANT: You could lose all of your money invested in the product. This is a high-risk investment and is much riskier than a savings account. ISA eligibility does not guarantee returns or protect you from losses.

The date of this financial promotion is 25 June 2020

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.

The details

Type
Secured bond
Target raise
£5 million
Rate of interest
Up to 6.43% AER
Term
1, 2 or 3 years
Income payments
Monthly or at maturity
ISA available?
Yes
Minimum investment
£1,000
Last updated: 25 June 2020