Where Is The NAV Growth?

Published on March 8, 2018
Principal outstanding tends to provide a more informative picture of growth than can be discerned from origination volume alone. Book size provides a more relevant illustration of the deployment opportunity and is also a function of two additional drivers – repayments and change in term.
The charts below show that, of the originators that provide loan level data for verification to AltFi Data, by far the biggest players in terms of NAV outstanding are Funding Circle and Zopa.

Market Invoice and Assetz Capital have a book size of a somewhat smaller scale. Whilst origination growth at Assetz is growing fast it is coming off a lower base. As a result that NAV outstanding is markedly smaller. At Market Invoice however the smaller book size is a function of the shorter duration of their loans. Market Invoice compete with the big names in terms of montly origination, but the shorter duration makes for a much smaller outstanding principal. The chart below shows that both of these originators are also currently seeing a rapid growth in book size.

It is also interesting to understand the drivers of this growth. Whilst at Assetz the story is simply one of an increased rate of origination, at Market Invoice the story is a combination both of origination growth and a lengthening of term…