Wunder offers investments in long-term funds (7-10 years) that finance a range of solar energy projects to organizations like small businesses, schools, and churches, offering accredited investors monthly cash flow of 6-8.5% with no fees. It's possible to find a better return on unsecured loans, but part of the upside with Wunder comes from supporting clean energy.
- Low minimum investment ($1,000)
- Built-in diversification
- No fees charged to investors
- Monthly payments (principal and interest)
- Promotes clean energy
Wunder is a niche Reg D investment crowdfunding platform offering investments in funds that in turn loan money to finance solar projects, primarily to small businesses, schools, and other institutions.
Types of investments Wunder offers
Wunder's funds invest only in loans to finance various solar projects. Some loans are long-term (typically 7 years) while others are short-term (some as short as 12 months). Investors participate in a particular fund with a specified term and projected return characteristics, but do not get to choose which specific projects are financed via that fund.
At the time of this writing, there were two active investments, the Wunder Term Fund and the Wunder Income Fund, with projected annual returns of 8.5% and 6% respectively.
What do you get when investing with Wunder?
Investors receive "Platform Notes" issued by a special-purpose LLC created for the fund, entitling them to a pro-rata share of principal and interest payments during the duration of the fund's term.
Wunder fee structure
Wunder does not charge investors any fees, though there are fees for borrowers. There are also no ongoing AUM fees, though Wunder does reserve the right to cover various administrative expenses using the funds' money.
Potential returns and cashflow
Wunder's investments offer monthly cashflow with varying terms and projected return profile. For example, at the time of this writing, the Wunder Term Fund targets an 8.5% annual return over 84 months, with the Wunder Income Fund targeting a 6% return over 120 months. Payments include interest and principal, amortizing over the lifetime of the loan (which differs from some of the real estate platforms, which pay interest-only until the loan terminates, when principal is returned).
Breadth of offerings on Wunder
As a niche platform, Wunder doesn't offer a very wide range of choices for investments. That said, within each active fund, investors get exposure to dozens of individual projects, baking in a degree of diversification. Once a fund is selected, investors are offered visibility into which projects are funded, but are not able to opt-out of any particular investment.
Regulatory framework and due diligence expectations
Wunder underwrites the loans themselves. Borrowers provide documentation like financial statements, other debt service and current utility bills, and following review loans are approved by an internal funding committee. Prospective investors should note that Wunder's loans are not secured, and borrowers are not required to provide any personal guarantee for the loan.
Wunder is a great example of the kind of diverse ecosytem investment crowdfunding is opening up. While many platforms will succeed (or not) by chasing scale, others like Wunder are carving out interesting niches catering to borrowers poorly served by traditional financing options and delivering a decent return to investors who are at least as interested in supporting sustainable energy projects as they are in maximizing their return.