Global Market Backdrop
Recent geopolitical tensions, including developments in the Middle East, have created a more uncertain global environment, particularly around inflation and interest rates. While this can influence the timing and direction of rate movements, it does not directly impact PIP’s lending activity, which remains focused on UK borrowers and the UK property market.
During March, both equity and bond markets experienced notable volatility and short-term downturns, highlighting the sensitivity of traditional asset classes to global events. In contrast, PIP’s loans represent a secured debt investment, focused on stability and consistent returns, helping to shield investors from this type of market fluctuation.
How the Model Performs in Different Markets
PIP’s approach is designed to work across changing market conditions. When interest rates are higher, investor income typically increases, although transaction volumes and exit timelines may slow. When rates fall, investor returns may reduce slightly, but market liquidity tends to improve, supporting quicker refinancing and asset sales. The model is not reliant on a single outcome, it is built to adapt through the cycle.
Conservative Lending, Structured Protection
Every opportunity is underpinned by a conservative and highly structured approach. Lending is typically capped at prudent levels, averaging no more than 75% LTV across the PIP portfolio, ensuring a meaningful equity buffer sits beneath our position. Security is taken through asset-level charges, supported by debentures over borrower assets and cashflows. This is reinforced by comprehensive legal and commercial due diligence, alongside ongoing loan surveillance and active monitoring throughout the lifecycle of each transaction, with a clear focus on protecting investor capital.
Built-In Exit Visibility
A key part of PIP’s approach is ensuring clear visibility over loan repayment from the outset. On larger development transactions, this is supported by early-stage sales and contracted revenues, creating a meaningful buffer between the loan exposure and expected completion proceeds. Recent transactions have demonstrated sales coverage more than 1.25x the gross loan facility, providing strong support for both capital repayment and accrued returns.
In addition, current live schemes such as Smithfield Lofts and Southside Residences in Birmingham, funded alongside Prosperity Wealth, have seen an increase in sales activity during March. These developments continue to attract strong interest from overseas investors, particularly expat buyers, reinforcing the UK’s ongoing appeal as a stable and well-established investment destination.
This approach reduces reliance on future market conditions and provides greater certainty over exit.
A Proven Track Record
PIP’s track record reflects the consistency of this approach, with over £500 million deployed and more than £200 million returned to investors, without any capital losses or defaults to date. This performance has been delivered across a range of market conditions, including periods of rising interest rates and reduced liquidity.
Tested Through Market Cycles
Since inception in 2017, PIP has operated through multiple periods of market disruption, including Brexit-related volatility, the COVID-19 pandemic, rising interest rate cycles, the Ukraine conflict and ongoing geopolitical tensions such as the current US-Iran war. Throughout these events, the focus on conservative lending, strong security and disciplined underwriting has remained unchanged, with investor capital protected and interest obligations consistently met in full and on time.
Focused and Selective
PIP operates across a targeted range of UK property market sectors, primarily residential and leisure, allowing for greater control and visibility over each transaction. This focused approach ensures exposure to sectors with strong underlying demand, while maintaining a selective strategy that prioritises quality, security and risk-adjusted returns over volume.
Using the Property Market as a Defensive Asset
In periods of elevated inflation, the UK property market has historically shown resilience, with asset values and income levels adjusting over time. This provides an additional layer of support to the assets underpinning each transaction.
In Summary
While the global environment is less predictable, PIP’s approach remains consistent, centred on UK-focused, asset-backed lending and a diversified exposure across multiple borrowers, transactions, asset classes and geographies throughout the UK. This is combined with conservative structures, strong equity buffers, disciplined underwriting and clearly defined exit strategies. Together, these principles underpin our confidence in continuing to deliver stable, risk-adjusted returns, regardless of wider market conditions.
