As any other investment opportunity, the offers listed on Viventor are associated with a number of risks. Please bear in mind that risks can cause significant deviations from the expected return, resulting in either profit or loss. All possible losses are borne by the investor, and therefore we advise you to carefully analyse and evaluate all associated risks, consider their impact and consequences.
Prior to commencing activities on Viventor marketplace, please carefully read the list of risks below. The list is not definite and does not cover all risks that can potentially impact performance of your investments.
Credit Default risk
On Viventor marketplace, you can invest in a range of different loans. The repayment of your investment is directly dependant from the repayments of each particular borrower. In some cases, loans are secured with an underlying collateral, Buyback Guarantee from the Loan Originator, or another additional layer of security, making debt collection and repayment enforcement relatively easier. In other cases, loans are unsecured, and therefore carry higher risk of repayment delay and borrower default.
Loan-to-Value (LTV) ratio is an important factor when attempting to predict Credit Default risk. LTV is a ratio that represents value of the loan against value of the underlying collateral.
In order to diminish exposure to Credit Default risk, we recommend investing only in secured loans, as well as looking for loans with lower LTV ratios.
Loan Originator risk
You can find loans from various Loan Originators on Viventor marketplace. Each Loan Originator is a professional lending entity that has all the required expertise, as well is compliant with all relevant regulations in its respective country of operations.
As every other business, lending companies are founded with a purpose to generate profits. In case of unsuccessful business activities and failure to achieve the targets set, a Loan Originator can go out of business and stop operations.
Viventor goes out of its way in order to ensure prevention of such cases. Prior to partnering with a Loan Originator, Viventor conducts a thorough Due Diligence process, consisting of financial, legal, and other analyses. Also, ongoing monitoring of Loan Originators’ performance is carried out. In the unlikely event of a Loan Originator halting its activities, Viventor shall collaborate with the company and its appointed insolvency administrator in order to settle all outstanding investments in the particular Loan Originator’s listings on Viventor marketplace.
In order to diminish exposure to Loan Originator risk, we recommend diversifying your investment portfolio across several different Loan Originators.
Viventor has ensured sufficient amount of financial and other resources to support its operations and development well beyond the projected moment of turning profitable.
Should the unlikely case of Viventor going out of business occur, Viventor shall collaborate with the appointed insolvency administrator in order to achieve successful settlement of all outstanding investments and partnerships. Also, Viventor is collaborating with a Certified Auditor Office, providing a backup of all investment data for storage to the Auditor on a monthly basis.
In order to diminish exposure to Operation risk, we recommend spreading your investments across different asset classes and platforms.
Focusing investments on only one asset class or investment type results in high exposure to the respective asset class or investment type. Therefore, even smallest fluctuation can affect the return to a very large extent.
In order to diminish exposure to Concentration risk, try diversifying your investment portfolio across several different asset classes, investment types and geographies. In context of Viventor, building a portfolio that consists of different types of loans from various countries and Loan Originiators is recommended.
All loans listed on Viventor are listed in Euros. In case of depositing funds in different currency, please be aware of possible fluctuations of the currency exchange rate. These fluctuations can result in both higher losses and profits.
In order to diminish exposure to Currency risk, try using some of the accessible risk hedging tools out on the market.
Depending from the borrower’s repayment discipline and other factors, projected investment term can vary and change, including being extended for a period of time, and therefore resulting in reduced liquidity.
Prior to making an investment, carefully evaluate your capability of holding the particular investment until and beyond the projected maturity.
Market risks are unfavourable event at the market level that can affect both value, return and performance of an investment. Some such risks are Macroeconomic risks, Political risks, Legal risks, Inflation risk, and others.
In order to diminish exposure to all aforementioned risks, building investment portfolio that covers various asset classes, countries and investment types is advised.