29 June, 2016

P2P Global Investments Plc Buyback Shares to Counter Brexit Effect

P2P Global Investments plc

The global investment trust, which is the largest closed-ending portfolio offering exposure to the peer-to-peer lending space, is a British-based institutional investor in consumer and SME loans and corporate trade receivables. Established in 2014, P2P Global Investments plc is a constituent of the FTSE 250 index and listed on the London Stock Exchange.

P2P Global Investments has invested over £800million, and with investments into marketplace lending platforms such as Zopa, RateSetter and Funding Circle, it has been the primary institution investing in peer-to-peer lending UK.

Brexit Impacts P2P Global Investments

Markets tankes after the announcement was made on Friday 24th that the UK is going to ‘Leave’ the European Union. As a result, P2P Global Investments plc suffered an almighty share price dive (Monday 27th in the picture):

On Friday 24th, P2P Global was only down 1.37%, with the FTSE 250 down six-times that at close of trade. This week, however, 27th – 30th has seen P2P Global Investment’s share price plummet from 848.69 Monday 08:00am to 800.00 at 12:00pm. Now, Thursday 30th, it’s back up to 845.25 as demonstrated in the image above.

P2P Global Investments Stabilises by Buying Own Shares

On Monday 27th June, P2P Global bought back 34,421 ordinary shares at 804.3 pence per share. There are 86,306,803 ordinary shares in issue.

Simon Champ, the lead manager of P2P GI, believes the fund’s cash pile of £400m was better spent negotiating strategic loan purchases. The decision to buyback shares was deemed a move to defend the share price moving to a wide discount. On Tuesday, P2P GI’s discount price was 20.3% - to put this in perspective, P2P GI’s discount price was at an 18% premium in its opening six months after launching in 2014.