|
Post by mrclondon on Feb 3, 2016 13:33:12 GMT
From www.fundingknight.com/news/news-release-a-new-path-for-strategic-development/ (dated yesterday, Tue 2nd Feb)
"FundingKnight and GLI Finance have had early discussions in the course of GLI’s new management team’s review of its strategic plan and platform investments. These discussions have identified some clear differences in the two companies’ approach to strategic development. Accordingly, FundingKnight and GLI have agreed that it is helpful to recognise quickly that it is their mutual interest to pursue separate paths.
Going forward, GLI will no longer be providing loan funding for the FundingKnight platform. FundingKnight is in active discussions with a number of parties in relation to replacement of funding lines. It has a strong pipeline of customers after a record year in 2015.
The FundingKnight Board is providing the short-term working capital requirements of the company through an equity injection. GLI has also rescheduled a working capital loan to support FundingKnight’s funding position.
GLI remains an important shareholder in FundingKnight, with a 24% equity stake, and a substantial investor in FundingKnight’s loan book. We would like to thank GLI for its support as a shareholder and a funder of our loan book since 2013.
Although the withdrawal of the GLI funding line may cause a short-term reduction in loans being offered on the platform, the Board remains extremely confident in our long-term prospects, based on solid fundamentals and our current growth trajectory."
(My bolding)
|
|
|
Post by wiseclerk on Feb 3, 2016 14:37:09 GMT
I find it strange that they decide to remain a major shareholder but cease to provide funding citing clear differences in the apporach to strategic development.
|
|
ben
Posts: 2,020
Likes: 589
|
Post by ben on Feb 3, 2016 15:16:08 GMT
I find it strange that they decide to remain a major shareholder but cease to provide funding citing clear differences in the apporach to strategic development. You would have thought if they were remaining as major shareholders they would carry on investing in them until a new investor was found not just stop even if they never planned carrying on long term
|
|
jjc
Member of DD Central
Posts: 414
Likes: 632
|
Post by jjc on Feb 3, 2016 15:23:28 GMT
Nothing strange, they will be looking to sell their stake to a new buyer. No point in pulling the plug, hence also the WCL. Thanks mrclondon . That news explains why I (like others presumably) got a call from FK yesterday, sounding me out on what my lending intentions were on the platform. They're good folk (decent honest people with reasonable software imo) & I hope they can find a long-term position in the market. With rates falling on many platforms it may be that FK's proposition (previously always too low yield imo, out of line with the market - perhaps partly due to GLI creaming?) becomes more interesting. Their rates are similar (or superior?) to AC (2016 model) now. Scaling is the big issue ofcourse. FK could be the first of a series of P2P m&a's? TC + FK make sense? (better software finally for TC!) Challenger bank/new entry buys FK? (would be interesting to see the price paid for, no disrespect intended, essentially p2p software in good working order) AC buys FK? FK + Abl? (still small, but good mix of loans & perhaps, with some tweaking, some of the best rates available in future?) Even SS buys FK?!? (both south-coast, & SS get to expand their offer to SME) Or (at a stretch) FK + Rebs (still small, but good south/north synergy, Rebs finally get some decent software & experienced management, & ethos/style not a zillion miles away from each other imo). My personal (heart over head) romantic fave option. Lots of possibilities, just hope something works out. FK are hidden in the depths of this forum, if I was them I'd be trying to get onto the forum's main page & really start engaging with lenders here. Can the mods do anything to bump them up onto the main page?
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,788
Likes: 11,007
|
Post by ilmoro on Feb 3, 2016 15:56:21 GMT
FK are hidden in the depths of this forum, if I was them I'd be trying to get onto the forum's main page & really start engaging with lenders here. Can the mods do anything to bump them up onto the main page? They were but got relegated by MT. Down to traffic in the end
|
|
|
Post by jackpease on Feb 3, 2016 16:25:09 GMT
I'm with you JJC - i have great fondness for FK from early days but along with Rebs and Assetz i'm winding down simply because of deal flow. It'd be great if the three merged from a position of strength rather than wither on the vine and have to do something in haste Jack P
|
|
bababill
Member of DD Central
Posts: 525
Likes: 243
|
Post by bababill on Feb 3, 2016 23:12:20 GMT
entered in wrong company forum. message deleted.
|
|
jjc
Member of DD Central
Posts: 414
Likes: 632
|
Post by jjc on Feb 4, 2016 0:14:39 GMT
Not sure Assetz are going to wither on the vine jackpease , seems they’re (finally) on the cusp of a very good roll. (Personally just not hugely enamoured of the rate loss that goes with this). If you’re looking for new loans you might (fingers still a bit crossed) find you can get properly giddy on AC this year. Do feel it’s important to support the smaller players, but can’t see AC participating in that 3-way merge. From their apparently new-found position of strength only logic I can see for them with FK is taking out a competitor, perhaps a bit of further origination strengthening (or – more interestingly but a long shot – as a way of keeping GLI in the fold as one of their insto backers. Not sure how GLI would view this / their take on P2P now) If I can change my mind slightly on my fave (still plenty of heart but perhaps bit more head too) option – that would be FK + Abl (& if room/value poss also Rebs). ablrateandy – we’re not gonna get a comment from you obviously, so just drawing your attention to this thread. You can always smile though (for whatever reason) It's good to smile ;-)
|
|
|
Post by jackpease on Feb 4, 2016 7:49:09 GMT
Assetz .... they’re (finally) on the cusp of a very good roll. They've been reliably optimistic about growth in all the years i've been with them! Jack P
|
|
kaya
Member of DD Central
Posts: 1,150
Likes: 718
|
Post by kaya on Feb 4, 2016 10:18:31 GMT
Seems to me there are too many small players on the SME marketplace, all completely dwarfed by FC. What about if, say, FK, LC, & Rebs (for example) were to come to an agreement whereby they shared the listing of new loans i.e. loans requests would appear on all 3 sites? This is a purely speculative thought of course, and probably impossible, but is it an altogether silly concept? It may well be that full merges will be neccessary in future in order to survive and compete with FC.
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Feb 4, 2016 10:27:49 GMT
Perhaps some of the underwriters who are getting no business from AC now might be interested in working with FK, at least with secured loans. Maybe the incentives wouldn't be good enough.
|
|
jimbo
Posts: 234
Likes: 42
|
Post by jimbo on Feb 5, 2016 1:41:25 GMT
My own favourite would be a Thincats - FK merger. Thincats deal flow combined with FKs software would make a formidable combination. Only problem would be Thincats minimum loan part sizes of £1000, but that needn't be a showstopper. A data migration would introduce complexity though. Probably getting ahead of myself thinking about this... I cannot believe that only Funding Circle are capable of achieving economies of scale. Personally, I think when the Business Cycle turns - as I think it's starting to - FC are going to see some of the highest default rates (just my opinion/gut feel based on the direction they have gone to favour the borrower over the lender; fixed rates at the levels they are sends no other message to me, along with the provision of minimal information to lenders). For more about the Business Cycle, see the following: seekingalpha.com/article/268760-using-the-ism-cycle-as-an-investment-guideThe ISM is currently sub-50; think it hit 46 a week or too ago from what I remember...
|
|
|
Post by jackpease on Feb 5, 2016 6:17:01 GMT
>>>> FC are going to see some of the highest default rates I don't understand??? FC has lowered rates for us lenders - but also presumably borrowers so attracts better risk borrowers less likely to go pop in a recession? Those paying lenders high rates are charging borrowers higher rates therefore more risk? Jack P
|
|
jimbo
Posts: 234
Likes: 42
|
Post by jimbo on Feb 5, 2016 7:53:38 GMT
>>>> FC are going to see some of the highest default rates I don't understand??? FC has lowered rates for us lenders - but also presumably borrowers so attracts better risk borrowers less likely to go pop in a recession? Those paying lenders high rates are charging borrowers higher rates therefore more risk? Jack P Maybe I'm being too cynical. However, that's like saying people/entities who borrowed excessively pre-2008 have since used the period under ZIRP to prudently pay down their debt. USD $60 trillion more debt in the World now than in 2008 puts paid to that idea. Similarly, saying FC lowering rates must be attracting better risk borrowers seems equally misconceived. Given they've got quants building and running risk profile models against borrowers coming to the platform, providing your business passes the model and is assigned a risk band, it's game on for you to borrow on the platform (plus isn't the credit rating no longer a primary consideration for a borrower on FC to be deemed credit worthy these days?). Depends how much faith you have in their quantitative models. Personally, I'll wait until I've seen them get through a recession before expressing my confidence. Looking at borrowers currently coming to the platform and being passed on to us serfs in the partial loans market, very few of them have anything that marks them out to me as particularly recession proof. Time will tell, but I'm personally anticipating defaults to spike in the next recession; especially amongst businesses who've used the platform to fund working capital requirements. It's not hard to get funded on FC at the end of the day once your application has been approved by the platform. Previously when lenders could set rates, there was also an incentive for directors to answer questions in the Q&A. Now there is none (although I consider it a positive if directors do take the time now to answer valid questions being put to them).
|
|
daveb4
Member of DD Central
Posts: 220
Likes: 116
|
Post by daveb4 on Feb 6, 2016 8:19:44 GMT
Totally agree.
To be fair my concern over FC is also making sure they do not give P2P a bad name. I doubt it but this is a risk.
One issue with FC is that i think that their rates have come down and risk gone up.There are too many businesses 'needing working capital', 'employing more staff to hopefully improve the business' and 'paying tax'. Don't get me wrong these are justified reasons but not sure some of these businesses should be borrowing more money.
Of course they do due diligence but not so sure much on the businesses themselves as far as affordability unlike the majority of the smaller sites such as FK,AZ, SS.
I especially deal with property on that site but risk gone up and rates down in last year.
I think default rates will go up before the recession and 2017 could be a challenge for them. They have had a number of 'contracts' with banks taking up their not agreed loans and if bad news comes out the banks will stop advertising them and stop their introduction of deals?
I am possibly far too negative here as they are a big site, easy to use, cheap, easy to borrow and brokers like them due to ease of use and quick payment of fees.
Most investors on FC are happy with an auto income with no hassle say 8% - I am not sure they are too fussed about some businesses going into liquidation?
Heh i still have approx 30% of my P2P with FC so not too bad but from speaking to credit guys in FK I know they are far better at their DD.
Will GLIF make a difference not sure - if you like FK we need to make sure we support them via this site and with funding?
|
|