# Abundance Investment Isa

The previous post here was written so long ago (2017-04-05) that it is now out of date and potentially misleading. I'm going through many of these articles one by one to update where possible but it is taking some time.

# About Abundance Investment ISA

Abundance Investment were one of the first established P2P platforms to offer a fully functioning IF ISA. They focused on renewable energy projects like wind turbines or solar farms. When I looked down a list of their early investments, they generally targeted between 5% and 12%.

I found it harder to understand the type of investments they offered. They used debentures and talked about Internal Rates of Return (IRR) rather than a fixed monthly interest rate.

Here are some questions and answers I originally asked the team, back in 2017:

# Q: How did it all begin: what is the background to the platform?

A: Abundance’s three founders come from very different career backgrounds: Karl Harder started out as a parliamentary researcher before founding his own green business; Louise Wilson was in a senior position at UBS Investment Bank, in charge of multimillion pound share offers and fundraising for global companies; Bruce Davis was an anthropologist who specialised in the study of how we think about and use money. He had helped create the world’s first peer-to-peer lending site Zopa.

Together they wanted to offer people investments in the things they cared about, without a compromise on financial return. The result was Abundance: beginning with renewable energy, people could invest from just £5 into individual projects that do something good for the environment and society with a genuinely good financial return too. Fees are paid by each investment project rather than by investors, so when Abundance quotes a return that is what investors can expect to get.

Having started with established renewable energy such as wind, solar, and biomass, Abundance is now looking to enter new energy sectors – e.g. tidal, anaerobic digestion – and wider social investments in the things we need more of – e.g. schools, social housing, GP surgeries.

# Q: Can you explain a little more how the IRR’s and Debentures you offer work?

A: When an investment is made on Abundance it is in the form of a Debenture. Just as you might buy a bond or a share, you buy a Debenture, which is a regulated investment. Their features and benefits and the types of Debenture can be found on our website.

We typically quote our returns in the form of an IRR – Internal Rate of Return. We use IRR because it gives an average annual return that accounts for two things:

1. When you get money back.
2. How much money you get back. This makes it the best way to describe the returns on our investments as they typically return an equal portion of the capital invested each six months, alongside an interest payment at the same time.

So, as time goes on, the money you invested and the interest you are earning gets returned to you at regular intervals, and you can spend or reinvest it as you see fit. All the while, your ongoing returns in the project are still calculated based on the amount you originally invested so that as your outstanding capital in the project gets smaller, your returns relative to that capital are increasing.