Abundance Investment: innovative UK companies and city councils

Note: This is an article from 2021 and does not reflect latest developments at Abundance. I plan to write an update in 2026.

How investing through Abundance creates Impact

Abundance Investment is a certified B Corp based in and providing investment opportunities in the United Kingdom. Their mission as outlined in the Abundance blog is to “accelerate the transition to Net Zero” to which the British government committed in 2019. Compared to other crowdlending platforms they stand out in several ways:

• Funding is focused on innovative energy companies developing all kinds of new renewables, as well as housing projects
• Since last year, Abundance has begun experimenting with low-risk “council investments” to fund green and social projects in UK municipalities
• The only crowdlending platform I know of allowing you to trade your investments with other users. This provides investors not only with a shorter investment horizon, but also broadens the projects available for investment and diversification.

The first thing you will notice is the unique style Abundance uses for its website and visuals. I for one quite like the paper cut style and colours they use. Nothing to influence your investment decision obviously, but hey, we’re all humans who are influenced by good design!

Abundance investment opportunities can be roughly distinguished in three categories:
The broad range of innovative energy projets create interesting opportunities for investors with a particular interest in climate change, renewables and the energy transition in general. With projects for waste, biomass, tidal power, wind and solar you’ll have a hard time finding an energy form that has not yet been funded. More humble projects aren’t shunned either. Energy storage or creating power from municipal waste may be less flashy, but are nevertheless important building blocks for our current and future energy system.

Sustainability is not only about eliminating CO2 emissions, however. There is also a social dimension to it. With affordable living space an issue in many larger western cities, Abundance lets you invest in social housing projects in UK cities such as Liverpool and England.

The latest addition to the Abundance portfolio consists of council investments to provide municipalities with funds for green projects to accelerate progress toward Net Zero.

Terms: 1.2 – 12%, <1 – 16 years duration

As many other platforms on the market, Abundance investments are loans (or debentures), meaning investors provide capital and receive it back with interest over time. Depending on the investment, returns vary wildly. Not surprisingly, investments in new, as of yet unproven tidal power are risky and therefore come with a juicy interest rate of 12%. Most projects hover between 5 – 8%, however. An exception are the council investments. Since providing governments of rich countries is generally considered a very safe investment, risk-averse investors will have to make due with modest 1.2% return per year. Which is still easily 20 times higher than a savings account, though…

Similarly, the duration until the full capital is repaid can range from under a year for projects bought on the secondary market to 16 years – enough time to raise a young adult in the meantime! I imagine few non-UK investors are willing to hold an investment that long. But if you’re a UK resident with a connection to the place where the powerplant is being built, it’s a different story altogether. Or, if you don’t eat scones and prefer coffee over tea: remember your magical honeymoon in Scotland? Well then, what better way to remember for the next 14 years than by investing in Scottish windturbines!

Project information and other features

A helpful feature to create trust in a project is to provide a detailed project description. Abundance does a good job in ensuring transparency on essential information. On 6-9 pages, each borrower raising capital has to provide further details on project execution, governance and associated risks. Some projects even come with a 60-page project briefing explaining the management team’s experience, technological details or environmental impact assessments. This makes sense, since some borrowers aim to raise several million pounds, far more than on most other crowd investment platforms. However, there is no clear correlation between details given and amount raised.

As other UK platforms, Abundance provides the possibility for tax-reduced investments to their British investors, as well as the option to set up a Pension Portfolio. Since I am not eligible, I cannot say anything on the quality of these offers.

Fun fact: you can sometimes still invest in Abundance Investment themselves by buying shares on Seedrs‘ secondary market. I did so myself, but more for fun than in anticipation of any serious returns.

The marketplace – or how to invest in tidal power before it’s cool

Ever dreamed of being a hipster investor? Ok, probably not. But in any case, a “secondary market” to trade existing loans with other investors is the fastest way of finding those fancy new-energy-investments you’ve been dreaming about – including rare investments in tidal power. Of course, investing in loans instead of equity (such as through Seedrs) means you won’t actually benefit from the future growth of these new energy forms. But you helped make it happen!

The secondary market works like an auction:

1. A seller wants to sell all or part of an investment or get out of it altogether. He/she places it on the marketplace, setting the amount to be sold and a minimum price. The closer the loan is from maturing, the higher the return will be as a percentage of the capital still invested, and thus the higher the price. If the borrower has delayed payments in the past or is struggling, the price is likely to be lower. The Monnow Valley CHP project sold for only 62.5% of the original sum over the past 12 months, due to various troubles with production and subsidies.
2. Buyers can now bid for the loan, with the highest bidder winning.
3. To finalise, the buyer needs to confirm his or her intentions via e-mail to both seller and Abundance.
4. Once the transaction is complete, the investment will show up in the buyers portfolio as if it had been bought during the initial funding.

A few investors seem to be buying and selling small chunks of investments regularly, though I don’t really see the point in that. Prices don’t fluctuate as wildly as they tend to with shares, so it’s probably not worth your time. On the plus side, this means that the market is “liquid”, meaning it should not be too much of a problem to sell your investments if you want to withdraw.

My experience with Abundance Investment

I have been invested with Abundance since 2019 and my experience has been mostly positive. It’s fun to follow the wide range of interesting new projects and to read about their business in the detailed factsheets. Their communication via newsletters, blog entries but also investment updates is professional and helpful. Returns are very decent – but in my case only on paper. This is due to two reasons releated to my personal circumstances which have, in effect, all but erased my returns. Both are obviously not the fault of Abundance, but should be considered when investing as a foreigner:

The weak British pound destroyed value for foreign investors. Since my initial investments in 2019, the pound has lost about 6% of its value against the Swiss Franc, my own currency (thanks for nothing, Brexit!)

Her Majesty’s Revenue and Customs – which is just a snobish way of calling a tax collector. The British government keeps about 20% of all interest payments to investors. Apparently, being the world’s oldest monarch has not dulled Lizzies sense for good business. As an example, of a payment of £29.91 only £23.93 arrived in my Abundance wallet. Technically it’s possible to reclaim the tax if you reside in a country with a double taxation agreement with the United Kingdom. But it means jumping headlong into the depths of bureaucracy. I decided that my time and nerves were worth more than the tax I could have regained. Unfortunately, Abundance does not provide any support in this regard.

As for defaults, I have experienced only one struggling biomass plant, but which I had also bought for precisely that reason (it was sold at a hefty discount on the marketplace).

Conclusion: Pros and Cons of Abundance

• Pro: wide range of available energy investments not available elsewhere.
• Pro: very detailed investment fact sheets compared to other providers can provide the confidence to invest bigger sums, if you’re sufficiently diversified (see below)
• Pro: unique secondary market lets you sell investments early and allows for a certain degree of diversification
• Pro: creates actual impact. The projects might not be realised without Abundance funding.
• Con: Not suitable as a core element of your investment strategy (even more so than comparable providers), since all projects are UK-based and denominated in British pounds
• Con: Choice between accepting reduced returns due to withholding tax or the painstaking process of reclaiming it

Category	Crowdfunded Loans, fixed return (mostly)
Country of origin	United Kingdom (offers are denominated in British Pounds)
Geographical focus	United Kingdom
Minimum investment	£5
Cost	None for UK investors. Abundance charges each issuer raising money two fees — one for raising the money and one for administering the investment and investors on a yearly basis. Investors from outside the UK may face a £5 charge for making a withdrawal.
Referral programme	None
Similar offers	Trine (see Review) Lendahand (see Review) OnePlanetCrowd (Review coming soon) Energise Africa (Review coming soon)