iainf
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Post by iainf on May 27, 2018 21:01:19 GMT
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Post by munchydave on May 27, 2018 21:24:57 GMT
There is no best exit strategy. All investments are so late and overdue that they have been removed from the secondary market or the sales queue is so long with everyone desperate to get out that no one wants to buy.
The only option is to sit tight and take funds out as they trickle in.
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iainf
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Post by iainf on May 27, 2018 21:28:35 GMT
There is no best exit strategy. All investments are so late and overdue that they have been removed from the secondary market or the sales queue is so long with everyone desperate to get out that no one wants to buy. The only option is to sit tight and take funds out as they trickle in. Thanks Dave I was afraid of that. Are you sitting tight in the sale queue or still collecting interest ?
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Post by mrclondon on May 27, 2018 21:49:26 GMT
Welcome to the forum iainf . The consensus view of the forum is currently in line with your views of Lendy, i.e. negative. However, there are a number of investors who view the changes that Lendy have made over the last year or so in a generally positive light. I have increased my balance at Lendy by c. 50% since the beginning of 2018, but I do careful due dillegence on loans, ranking each loan low/medium/high for a) risk of default b) risk of loss on default. Consequenly I only invest in the small proportion of p2p loans which I assess to be lower than average risk. I then hold to eventual redemption as the bonus accrual on overdue loans that redeem in full compensates for the minor capital losses on other loans.
Lendy specialise in LARGE p2p loans, that is their niche in the market, one that is poorly served by others. It is an astute choice of business model for the platforms owners, if it can be made to work. The inevitable downside for lenders is poor liquidity in these large loans. The causes are many, but centre around insufficeint new lenders joining each month to take up the nth tranche of each of the mega loans. p2p lending is a high risk investment choice, and there are a finite number of people in the UK that can afford to take the risks involved.
Which is a long winded way of saying that if you aren't very near the front of a sales queue, then the speed of movement is such that you would probably be better accruing interest than waiting for a sale which won't happen. Bear in mind that most large investors prefer to contribute directly to the newly launched tranches of loans (to ensure they get filled and the project can proceed) rather than buying on the SM.
Days left is in my view a fairly meaningless measure of risk, and not one I take much notice of - I'm happy to buy negative day loans that meet my risk criteria, as I said the bonus accrual can be attractive.
You also raise the point that Lendy could fail. Unlikely in my opinion because the fees Lendy take from the large loans are also large, and they declared a significant profit last year, possibly the largest in the p2p sector. However, if they were to fail, the loan book would be run down in an orderly fashion by a third party already identified by Lendy (as per the FCA requirements). The risk is that in such a scenario, the borrowers may struggle to refinance the loans elsewhere resulting in forced asset sales which for partially complete developments could result in significant capital write offs. The recovery of Collateral (UK)'s loanbook should provide a good case study of this over the next 2 years.
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iainf
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Post by iainf on May 27, 2018 21:57:14 GMT
Anything with a sale queue of over about £20k, you might as well hold it and collect the interest. There's no point listing on the SM at the moment with its current pace. Ok great, thanks for the advice:-)
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iainf
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Post by iainf on May 27, 2018 22:09:32 GMT
Also thanks to the admin for taking the time to write such a long briefing:-)
It’s good to hear that Lendy isn’t a couple chelsea boys having a go. If they are prepared to stick with it then maybe we see some returns.
I guess one one calculation I’ve always wondered about is without new lenders putting cash on the platform, how can LY keep paying the interest. No idea what this is but very roughly if there are 10k lenders lending an average of 10k at 12% that would mean these guys have to source a million every month? (arithmetic not my strong suit). Not sure if that is sustainable...
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iainf
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Post by iainf on May 27, 2018 22:11:06 GMT
If you don't mind me asking iainf , why have you only just joined the forum yet you're already looking to leave Lendy? Good question. I’ve lurked for months but never felt the need to ask questions (felt I had it worked out - wrongly as it turns out)
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Jeepers
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Post by Jeepers on May 27, 2018 22:25:38 GMT
Also thanks to the admin for taking the time to write such a long briefing:-) It’s good to hear that Lendy isn’t a couple chelsea boys having a go. If they are prepared to stick with it then maybe we see some returns. I guess one one calculation I’ve always wondered about is without new lenders putting cash on the platform, how can LY keep paying the interest. No idea what this is but very roughly if there are 10k lenders lending an average of 10k at 12% that would mean these guys have to source a million every month? (arithmetic not my strong suit). Not sure if that is sustainable... Interest is withheld from the outset so Lendy holds it all along. At the moment I'm pulling out as are many others. If some big repayments come in then I'll look at reinvesting. To sustain the platform, Lendy must focus on recovering old money and get the default rate down instead of focussing on new loans.
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Post by mrclondon on May 27, 2018 22:35:15 GMT
Also thanks to the admin for taking the time to write such a long briefing:-) It’s good to hear that Lendy isn’t a couple chelsea boys having a go. If they are prepared to stick with it then maybe we see some returns. I guess one one calculation I’ve always wondered about is without new lenders putting cash on the platform, how can LY keep paying the interest. No idea what this is but very roughly if there are 10k lenders lending an average of 10k at 12% that would mean these guys have to source a million every month? (arithmetic not my strong suit). Not sure if that is sustainable... The rewards for the few p2p platforms that eventually achieve an IPO (or trade buyout from an established financial organisation) are what will motivate platform owners to work through the difficult patches. In reality many of the "disasters" in Lendy's loanbook are as a result of inexperience and inadequate processes which can be learnt from. A platform which has demonstrated conceptually it can generate good profits will be able to raise finance relatively easily to keep the wheels turning in times of poor cashflow. The risk of platform failure is intuitively far greater in platforms that write only a small value of loans each year and have never been profitable.
The interest we are paid each month is withheld from the loan drawdown for the entire period of positove days, and is held by Lendy (in theory) in a segregated account. Subsequent tranches of a loan may be used (in part) to extend loans as well as providing extra capital to the borrower. (A case in point is DFL036 which when drawndown will allow DFL012 to be extended). However, apart from development facilities, borrowers need to pay interest upfront to allow a loan to be extended.
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Jeepers
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Post by Jeepers on May 27, 2018 23:05:15 GMT
I'm not sure there's much point to this thread. There isn't a 'best exit strategy'. We are powerless.
We can only hope Lendy will get a grip on their recovery strategy!
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iainf
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Post by iainf on May 27, 2018 23:27:42 GMT
I'm not sure there's much point to this thread. There isn't a 'best exit strategy'. We are powerless. We can only hope Lendy will get a grip on their recovery strategy! Fair enough:-) Is there any pressure we can apply? Can we change their behaviour? I would feel a lot better losing my investments if they - Made sale queue process transparent - Paid interest for funds stuck in the sale queue longer than 72 hours - Provided an account manager for larger investors - Were more transparent and approachable - Gave advice based on platform data (not investment advise) - Didn't repeatedly fob off any contacts with copy-paste statements about terms and capital-at-risk I mean regardless of "your capital is at risk" buyer beware etc. I can't help feeling they shouldn't be allowed to sit on our cash without providing at least a realistic plan of action or pay some interest or admit the funds are gone. Just keeping investors in limbo doesn't seem right... Of course bashing them doesn't actually help anyone, but I would sure feel better if they were 10% less cock-sure:-) Righto, bed-time!
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Post by p2plender on May 28, 2018 0:08:28 GMT
'Watch this space'...  |
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hazellend
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Post by hazellend on May 28, 2018 5:33:49 GMT
I'm not sure there's much point to this thread. There isn't a 'best exit strategy'. We are powerless. We can only hope Lendy will get a grip on their recovery strategy! Fair enough:-) Is there any pressure we can apply? Can we change their behaviour? I would feel a lot better losing my investments if they - Made sale queue process transparent - Paid interest for funds stuck in the sale queue longer than 72 hours - Provided an account manager for larger investors - Were more transparent and approachable - Gave advice based on platform data (not investment advise) - Didn't repeatedly fob off any contacts with copy-paste statements about terms and capital-at-risk I mean regardless of "your capital is at risk" buyer beware etc. I can't help feeling they shouldn't be allowed to sit on our cash without providing at least a realistic plan of action or pay some interest or admit the funds are gone. Just keeping investors in limbo doesn't seem right... Of course bashing them doesn't actually help anyone, but I would sure feel better if they were 10% less cock-sure:-) Righto, bed-time! Suggest to carefully read the FAQs because you are very confused about a lot of points. The only viable strategy is to ride it out. A lot of people have invested when they are not happy with high risk. Another important thing is for you to come up with a long term investment strategy that is in keeping with your lower risk tolerance.
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Post by p2plender on May 28, 2018 6:47:40 GMT
Perhaps if they'd have stuck to bridging loans then things may have worked out better. All these DFLs at a time when investor sentiment and appetite is on the floor. I'm not really sure how they can turn things around. I've just looked at the fortnightly B/S and the loan book is nothing short of disastrous. Those 2 dreaded words appear to belong to Lendy updates... 'Unfortunately' and 'Despite'.
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r00lish67
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Post by r00lish67 on May 28, 2018 7:51:24 GMT
It’s good to hear that Lendy isn’t a couple chelsea boys having a go. I'd say this is very unfair. We have no evidence that they're from Chelsea at all. In fact, digging through the archives, we find evidence that they may in fact be from further North.  This also explains why so many P2P loans are from Liverpool. In case you're wondering, that's Paul on the right. He used to be a bit more 'lairy' in his youth.
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