SyndicateRoom, the online investment platform which allows individuals to invest alongside the professionals, has launched its study Rise of the Growth Hunters to support UK investors who are looking for faster growth in 2017.
The report analyses sentiment and expectations of over 1,000 retail investors alongside five years of company growth data from Beauhurst.
It reveals that:
- Risk appetite is rising among UK investors, driven by low investment returns. 39% of individual investors said that they are more willing to take risks than they were a year ago, compared to 18% who said they would like to take fewer risks. Meanwhile, nearly 50% of retail investors in the UK consider themselves to be ‘off-track’ in meeting their financial goals and around half of UK investors in bonds believe they will see zero return, or worse, over the next year.
- Early-stage companies are seen as a route to higher returns. Around two-thirds of investors see ‘the prospect of higher returns’ as a big incentive to move into investing in early-stage equities. This is matched by the facts on the ground, with investment in early-stage companies seeing a rate of growth in the past five years that is more than six times faster than that of the FTSE all-share index.
- One in thirty early-stage businesses is likely to close next year. Of nearly 600 early-stage businesses analysed from 2011, with an average valuation of £3 million, 90 businesses (15%) had their valuations written down to zero by 2016.
- The average retail investor will be looking to allocate £20,000 next year for early-stage investment. That works out to be around 14% of the average investor’s current equity investments.
- Those with over £1 million to invest – the Million Pound Club – receive more information on early-stage businesses than the average investor. Around half of retail investors (48%) are not investing in early-stage businesses because of a lack of information about the company. Compared to the average investor, those with more than £1 million to invest are more likely to be granted access to an investment opportunity and more likely to be given additional information about a company seeking investment. Only 9% of individual investors said that there are no barriers to them investing in early-stage businesses.
Gonçalo de Vasconcelos, CEO, SyndicateRoom, commented:
We set out to provide information for our members – individuals investing alongside professionals – about where to find strong return on investment. In a low-yield environment, compounded by recent macro-uncertainty caused by Brexit and the US election, reliable information on high-growth investment is more important than ever. Our research discovered a fast-emerging part of the UK’s investment market that is hunting for greater growth and willing to accept a higher risk to achieve that investment return. When we founded the company three years ago, we set off on a mission to provide fair and transparent access to investment opportunities – by allowing retail investors to invest on the same terms as professionals. As we turn our attention to the opportunities for small business investment in 2017, we need to break down the barriers to this multi-billion pound opportunity we have uncovered, which is currently the preserve of the professional investment community.