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How the crowd is offering investment diversity

July 08, 2016 • By TAB team



The marketplaces that form the global crowd finance industry offer the ability to build a diverse investment portfolio. This is a significant benefit and is proving attractive to investors.

The marketplaces that form the global crowd finance industry offer the ability to build a diverse investment portfolio. This is a significant benefit and is proving attractive to investors.

The industry is giving access to investments that have traditionally been the reserve of just a few. This makes it possible for those with capital to find opportunities that can be expected to provide better returns than found elsewhere, offers security, supports specific industries/causes (not necessarily for financial return) or all of the above.

This diversity is illustrated by the different specialties of the platforms.

Breadth in the well known

For example, one of the best known purposes of crowd finance investment is to bridge the gap in business financing. Yet, for most, it is surprising to learn that there are nearly 700 platforms that are set up for this purpose worldwide, of which around 300 specialise in SMEs alone. For those deploying capital, this presents a variety of opportunities depending on areas of interest, nature of investment (return based, philanthropic, etc.) and risk appetite.

Rapidly catching up in number, are platforms dedicated to property. These allow investors to have a slice of the potentially lucrative commercial or residential real estate market. This category of crowd finance has grown quickly in number and volume in the past five years, and already has 224 platforms serving this market.

Another now established specialism is to originating consumer loans, enabling the crowd to access healthy headline returns. On those platforms, fund raisers can raise (usually unsecured) loans to finance purchases such as home improvements or a new car. There are over 450 platforms supporting consumer loan opportunities globally.



Niche crowd investment opportunities

Not all types of crowd finance have hundreds of platforms; some are more niche.

For example there are 85 platforms that specialise in investments into environmental endeavours, including renewable energy infrastructure. The terms of these investments range from months to many years.

Other platform niche specialities include biotech (32 platforms), food and drink (13), and Bitcoin (9).

Niche doesn't only mean sector type either; there have been 12 Sharia-compliant platforms launched, taking crowd finance to new markets across the Middle East.

As the crowd finance industry continues to mature, the diversity of investment opportunities is proving popular with investors. At Crowdsurfer, we are building the discovery tools which enable you to find those suited to you. Register here to start using now.