A 3D approach to direct lending:  Due Diligence, Diversification and Downside Protection

BondMason Core has been recognised as providing one of the highest quality offerings on the market, achieving the maximum Defaqto rating of 5 stars1.  Stephen Findlay was delighted, yet unsurprised with the announcement;

The team at BondMason is highly experienced with a number of the team having held investment director or partner-level positions at blue chip investment management companies such as Blackstone, JP Morgan and Fidelity. We bring this experience to bear on our processes and approach, for the benefit of our clients. We are delighted to announce that our diligent approach has been recognised by Defaqto, awarding BondMason its highest 5-star rating.”


Defaqto 5 Star Rating

How BondMason achieves 5 stars

Defaqto Star Ratings for financial products are based on the teams’ independent, expert analysis of the most important product features and benefits. Defaqto analyse the direct lending and peer to peer market sector and for every comparison criteria, they set a benchmark for a 1-5 ‘Product DNA’ score.

Based on facts not opinions, Defaqto Star Ratings provide consumers with an expert benchmark so that they can see at a glance how products and propositions compare in this continuously evolving and changing market place.” David Cartwright, Head of Insight & Consultancy (Wealth and Protection) at Defaqto

These criteria cover a range of categories, assessing business processes, product offerings as well as the overall client experience. BondMason met and exceeded the benchmark for a number of ‘Core Criteria’, resulting in BondMason Core achieving a Defaqto 5 Star Rating.

Setting the standard

Since 2015, our clients have achieved average gross returns of at least 8% p.a1, investing over £40M across 6,000 curated loan investments.  This enviable track record has been achieved through our 3D approach:

The 3Ds of direct lending


1. Due Diligence:

We've reviewed 150 Direct Lending providers and peer to peer platforms, conducting rigorous due diligence to select our 33 approved lending partners. Before onboarding a platform, we meet with key decision makers to assess their lending criteria, processes and procedures, ensuring they align with our exacting standards.

Once accepted, the BondMason Investment team will scrutinize available loan opportunities daily.  We only select good quality, well-priced loans that will enable our investors to achieve target returns.  We will never compromise on quality and as such, only 1 in 4 loan opportunities are approved.

Our DD does not stop here. We work closely with our Lending Partners and continue to vet their procedures and processes on an ongoing basis.

2. Downside Protection:

You cannot lose more than you invest. Your upside is capped in lending – the best you can do is get your interest and capital back – worst case scenario is that you may experience a loss in the event of a default. To date, losses have equated to just 0.2% of investments.

3. Diversification:

Spreading investment across different partners and loan types, with a focus on lending secured against property, helps to manage risk and target healthy returns. Given that your lending portfolio will be spread across 50 to 100+_loan positions (with no more than 2% of your funds in a single opportunity), risk is diversified further..

Making it easier to earn returns

Navigating the direct lending market is time consuming and difficult. We do the leg-work so clients can access returns easily. We are also proud to be considered thought leaders in the industry, providing valuable insight and commentary. 

Two of our market reports have received accreditation by the Chartered Institute for Securities and Investment (CISI) which aims to set standards of conduct and ethics for participants in the securities and investments industry, and to provide qualifications for such professionals.

Why investors choose BondMason

BondMason has achieved a stable and steady investment track record since 2015, from a conservative loan portfolio - with an average LTV of 56% - 85% of which is secured against UK property.

  • Diversification: Using the auto-bid tool, clients can easily allocate capital across a broad selection of loans and lenders, in just a few clicks.
  • Easy access to funds: We understand that circumstances may change.  With BondMason Core it is good to know that you are typically able to liquidate your investment and withdraw funds in 1-2 days.
  • Portfolio in your pocket: The online dashboard is easy to use on any device, so clients can monitor their investment performance anytime.
  • Real people: Our team are always at the end of the phone or email to answer any questions. We value client feedback and are always happy to hear how our service can be improved.

To find out more, read Tracey Whitmore’s article where she talks about what her typical day entails as an Investment Manager at BondMason:

1Defaqto 5 Star Rating applies to BondMason Core only.

2BondMason enables clients to access returns from loans secured against UK property. BondMason Core clients have achieved an average gross return in-excess of 8.0% p.a. since April 2015.

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