p2pfan
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Post by p2pfan on Jul 18, 2019 11:38:19 GMT
1.
I'm interested in investing a fair sum in the GBBA2 account, but am concerned about how readily I'll be able to access my funds should I need them. I've tried contacting AC but not received any concrete insights.
I fully understand that it depends on the current market situation and that can and will fluctuate. But, as matters stand, if you try to sell GBBA2 holdings:
- what ratio of your money do you manage to get within, say, a week?
- how much takes a few weeks?
- how much takes longer?
2.
Also, I understand that all loans to GBBA2 borrowers are asset-backed, which is (somewhat) reassuring. Obviously what those assets are and what the order of call on them (first charge, second charge etc.) is absolutely critical. AC are not able to provide any information as regards that and I don't have the time to go through every single investment. So does anybody have an idea how many of the investments may be property backed and even very roughly what ratio of those may be first charge, second charge or have some other form of backing on a property? E.g. there is a huge different between approximately 80% of them being first charge and 20% of them of being first charge.
2.
Last but not least, what's the maximum LTV, if any, for GBBA2 loans?
Thanks!
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corto
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one-syllabistic
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Post by corto on Jul 18, 2019 12:06:29 GMT
Ad 1  The complete GBBA2 was put up for sale early December 2018. Liquidity may well be different now. |
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Post by gramsky on Jul 18, 2019 12:46:53 GMT
1. I'm interested in investing a fair sum in the GBBA2 account, but am concerned about how readily I'll be able to access my funds should I need them. I've tried contacting AC but not received any concrete insights. I fully understand that it depends on the current market situation and that can and will fluctuate. But, as matters stand, if you try to sell GBBA2 holdings: - what ratio of your money do you manage to get within, say, a week? - how much takes a few weeks? - how much takes longer? 2. Also, I understand that all loans to GBBA2 borrowers are asset-backed, which is (somewhat) reassuring. Obviously what those assets are and what the order of call on them (first charge, second charge etc.) is absolutely critical. AC are not able to provide any information as regards that and I don't have the time to go through every single investment. So does anybody have an idea how many of the investments may be property backed and even very roughly what ratio of those may be first charge, second charge or have some other form of backing on a property? E.g. there is a huge different between approximately 80% of them being first charge and 20% of them of being first charge. 2. Last but not least, what's the maximum LTV, if any, for GBBA2 loans? Thanks! In answer to:- Q1 I can not give any definite timescales but in my experience funds are initially withdrawn fairly quickly but it tails off to a trickle towards the end for those loans that are not in default, but it depends how much you have invested. Defaulted loans will have trading suspended and will not withdraw until the suspension is lifted or the loan is either repaid or written off. Q2. Don't know. Q3. Approx 70%, but a word of warning: with the development loans although it states an LTV of say 70% this figure is really 'Loan to Gross Development Value' LGDV, so the initial security will no where near cover the 70% of total money borrowed over numerous tranches and the actual LTV may be as high as 400 -500%. ie Loan #548 (LTV=67.71%) is borrowing nearly £10m and has security of only £5m so LTV =200%. So your investment is not secure in case of default and unless you constantly monitor your loan investments by investing in the Manual Account you will have no control what is happening to your investment. Additionally if you are going to take the lazy way out and invest in the GBBA, only drip feed your money in in small amounts because up to 20% of your investment could be put into one loan at once and if that loan defaults you will have a large amount of money invested that you can not access.
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trium
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Post by trium on Jul 18, 2019 17:48:37 GMT
I keep a token £100 in GBBA just to keep track of which loans it is holding/trading. There are currently 89 loans in my account, largest is 7.36%. 15 of those loans are for less than a penny. One is suspended (#602 for a lender vote). Other lenders who have been invested longer will have picked up more - I started this 24 May. Highest LTV is 73.78%. Around 20 loans are at 65%+. Last time I sold out a GBBA2 account my experience was much in line with corto 's. Half was gone within 12 hours, 90% within a couple of days, but the last 10% lingered for weeks. A lot will depend on the size of the account - the way the Assetz matching algorithm works means that large holdings tend to take longer to sell than smaller ones. As for the assets themselves, there isn't an easy way to determine seniority etc other than examining each loan. The vast majority on Assetz are first charges with all tranches (if applicable) ranking equally. Some older loans have a poorer quality of security. |
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p2pfan
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Post by p2pfan on Jul 18, 2019 21:28:34 GMT
You guys are absolutely legends. Thank you for your very helpful replies. The point about 'Loan to Gross Development Value' LGDV being used rather than LTV is extremely important gramsky and thank you for emphasising it. I noticed yesterday with some loans I looked at that they're based on LGDV rather than LTV. Therefore, if they were to default before the development was complete, the lenders would probably struggle to get most of their money back. |
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ceejay
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Post by ceejay on Jul 19, 2019 11:44:35 GMT
In answer to:- ... Additionally if you are going to take the lazy way out and invest in the GBBA, only drip feed your money in in small amounts because up to 20% of your investment could be put into one loan at once and if that loan defaults you will have a large amount of money invested that you can not access. Just to pick up on that last point ... A little while ago, AC introduced an automatic rebalancing process so that investments within GBBA2 are automatically swapped between investors to substantially reduce this risk. Obviously, if you had a big chunk in something and it went bad in the few hours before the process ran then I suppose you might be out of luck, but that seems extremely unlikely. The people who have problems now are, I guess, those stuck in GBBA (not 2). In the relatively short time that I was in GBBA2 I found that I was automatically diversified into many tiny fragments. My selling process was also as described - some instant, some a bit slower, and one loan (which went suspended for a while) stuck until it was resolved. YMMV, but I can't see the value of GBBA2 as it stands: I'm in MLA for higher returns and more control, and in QAA/30DAA for hands off. The "higher" return of GBBA2 over 30DAA isn't enough to cover the additional risk of getting caught in a few bad or delayed loans.
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benaj
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Post by benaj on Jul 19, 2019 13:48:22 GMT
p2pfan, there's no guarantee for quick release of p2p investment. So far, I am happy with QAA and 30DAA and 90DAA. It's easy to operate, interest paid on time and easy to withdraw investment. The other AC investors would probably prefer the MLIA with more control. Regarding the GBBA2, like the GBBA, PSA, GEA, I think of them as legacy products. The interest can be withdrawn quickly when borrowers make a repayment if withdrawal option is set correctly. Getting 100% quickly in those accounts are not guaranteed and I haven't managed to do so as some loans cannot be traded on the secondary market.
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