Triple Point Income Service

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. Wealth Club investors receive an exclusive higher rate of interest usually only available to clients of financial advisers.

Since the service launched in May 2016, it has attracted £189 million from investors and 100% of bondholders have been paid on time and in full (March 2023). Past performance is no guide to the future. 

Please note, this is a private lending investment service, not a savings account, so 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. 

• 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 
• Minimum initial investment £10,000, £1,000 minimum for additional investments
• You can apply online

The manager

Triple Point Investment Management LLP was founded in 2004 and today manages more than £2.7 billion of private, institutional and public capital across four core areas: venture capital, energy and infrastructure, property and direct lending, leasing and private debt (March 2023). 

Triple Point’s private credit team manages around £1 billion across several mandates, including the Triple Point Income Service (March 2023). 

The 50 strong team is overseen by the two managing partners, Ben Beaton and James Cranmer. Neil Richards, a partner of Triple Point and Head of Leasing 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 215 people). 

Triple Point Investment Management was approved by the British Business Bank as an accredited lender under the CBILS. The scheme was introduced to help small and medium-sized businesses access loans and other kinds of finance up to £5 million, with the government guaranteeing 80% of the finance to the lender and paying interest and any fees for the first 12 months. Triple Point made both new loans and refinanced existing loans under the CBILS, so as to benefit from the protections it offered. These loans currently account for c.8% of the loan book (March 2023). The CBILS closed for new applications at the end of March 2021.

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 Triple Point Income Service currently has £76 million assets under management (March 2023) with more than 1,300 bondholders in the service. Since the service launched in May 2016, it has attracted £189 million from investors and 100% of bondholders have been paid on time and in full (March 2023). This includes April and May 2020 following the Covid-19 outbreak: note past performance is not a guide to the future. 

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. 80% of TPAL’s net assets are direct, secured lending, across a portfolio of 96 loans (March 2023). The largest two borrowers each account for 5%, and the largest ten borrowers a combined 36%, of the net assets of TPAL.

TPAL’s bad debt provisions and reserves amount to 9.1% of the value of the loan book (March 2023). This is in part due to Triple Point’s decision not to withdraw earnings from the business, although this may change in the future. This creates an additional capital buffer to aid the preservation of existing bondholders’ capital. Please note the level of reserves, the number of direct loans and sector exposures is subject to fluctuation. 

Secured lending

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 - £7.5m 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.

Other lending and leasing activities include:

• Secured Property lending, such as supplying secured bridge financing for property acquisitions
• SMEs leasing activities, such as to fund payment card terminals
• Providing receivable finance for UK telecom companies

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.

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.

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 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. 

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.