The investment process with Just involves both a Bond and an IFISA as part of the offering, as do a number of other similar companies. So what are bonds and IFISAs, and how does Just use them to offer the opportunity to ultimately invest in litigation funding?
The UK Government introduced the Innovative Finance ISA (IFISA) on 6th April 2016. This new type of ISA allows individuals to use some (or all) of their annual ISA allowance to invest into mini-bonds where many individuals lend money to one firm. The money raised usually then ultimately goes to make further investment, sometimes in new arenas like litigation funding or property opportunities.
The Just ISA facilitates investments in the Just Bond – UK government rules allow the IFISA option to be used with debentures such as the Bonds, which then lets Just offer the opportunity for investors to receive the interest earned tax-free*.
In the UK, bonds are investments which represent the debt of whoever is issuing the bond – a company or government. Bondholders effectively loan money to the bond issuer for an agreed period – and in return they are paid a regular income, represented by interest payments in the case of the Just Bond.
Some bonds are seen as less risky than some shares principally as they normally have a set repayment date when the sum invested into the bond when it was first issued is due to be repaid in full*. Also, in the event of the company being liquidated any assets available would be used to attempt to make repayments**. The Just bond has a minimum investment period of 3 years, and can go up to 5 after which the full face value of the bond is due to be returned.
The Just Bonds are non-readily realisable, asset backed***, fixed interest, transferable, debt instruments issued by the Company. The Bonds allow investors to lend money to the Company in exchange for interest payments – currently at 8% per annum. The Bonds pay a fixed rate of interest that does not change over its life.
Together, the IFISA and the Bond ultimately provide potential investors with a great return on investment tax free (dependent on individual circumstances), whilst also giving you the ability to invest in justice with our focus on the area of Litigation Funding.
To start your journey with Just, follow these simple steps:
*Your capital is at risk. Please be aware when investing that your capital is at risk and the value of your investment can go down as well as up. You may get back less than you invested.
**The fact that the bond is asset backed would not guarantee that all capital would be repaid. This also means that there is a liquidity risk and there is likely to be a delay in repaying your capital should you request it.