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The collapse of LC&F shows that investments boasting high returns also come with big risks

Tread carefully if you’re thinking about investing in peer-to-peer lending or “mini-bonds”– the risks are high and you could lose your money. That was the message this week from the financial watchdog, which issued a robust warning to consumers days before the Isa deadline.

The Financial Conduct Authority’s comments follow the collapse of mini-bond firm London Capital & Finance (LC&F), whose 11,600 investors have been warned to expect as little as 20% of their money back. They had invested a total of £237m in bonds promising returns of 6.5%-8% a year.

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Company’s three co-founders in line for combined windfall of £70m

Three friends who met at university are in line for a combined windfall of £70m after revealing plans for a £2bn float of Funding Circle, the British peer-to-peer lending business they founded eight years ago.

Funding Circle, which allows small firms to tap into a pool of money provided by thousands of investors, aims to raise £300m in a stock market float valuing the company at up to £1.95bn.

Related: Aston Martin unveils London Stock Exchange flotation

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