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Post by d_saver on Feb 1, 2017 18:32:16 GMT
One of the concerns I've been mulling over last few days with OC is the diversification. I have a few that are close to or at 10% of my portfolio and many at 5% or so. 10% seemed high to me given we (I) generally aim for 2% or so elsewhere, though OC's really a bit of a different asset class , so I did some (worst case?) napkin calcs
Max %10 of total amount invested in any one loan (OC states) assume 55% recovery (LTV are max 70%, 5% first loss by OC)
on 20k portfolio
2,000 in any one loan
loss of 45% of home value = 15% loss of loaned capital - 5% OC first loss = 10% = £200 loss after recovery 20k portfolio @ 4.7% per year yields £960 a year
So a loss a year brings the rate down to around 3.8%
Anyone seem a major flaw in my scribbling?
I'm pretty sure I have seen a little juggling of my loans soon after investment before, and they do state they will try and diversify you if there is a need, so I hope this does get done in the future. I think if the above calc is good, I'm happy. I have 42 loans in my collection at the moment.
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Post by vanessaiman on Feb 2, 2017 10:54:18 GMT
Hi all, Just a quick message to let you know that we are no longer experiencing a queue on the platform. Best, Vanessa This is good news for people wanting to get invested, but is the corollary that it will be slower to make a withdrawal? What is the priority when allocating new money between unfilled loans and withdrawal requests? Hi littleoldlady, No, the absence of the queue doesn’t in itself mean withdrawal requests will take longer. There are a couple of mechanisms through which we facilitate withdrawals – the first of which is new investments; new inflows will always first be used to replace those looking to withdraw. We won’t fund existing or new loans while people are waiting to exit. But if for whatever reason there aren’t sufficient inflows to facilitate withdrawals, provided we can, we ourselves will buy loan parts from those wish to withdraw before. Remember, we already pre-fund loans ourselves from our balance sheet before selling them on in part to new investors; that same facility can also be used if necessary to ‘grease the wheels’ from a liquidity standpoint. What's more, when it comes to allocating an investors funds we'll always do our best to make the process as easy and transparent as possible! Please do let me know if you have any further questions. Best, Vanessa
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Post by vanessaiman on Feb 2, 2017 11:09:05 GMT
Hi littonowl, Just a bit of clarification on late-payments in case useful. There are two reasons we’d flag a loan in the system: either the borrower misses two interest repayments; or they fail to repay the loan on time. In the majority of cases, a failure to repay the loan on time is due to a sale falling through, or a refinance taking longer than expected. This sometimes occurs when lending money, and shouldn’t be a cause for concern. Octopus Property has a clear process for dealing with missed payments – a process that begins with emails and letters being sent to the borrower and their solicitor, notifying them of our intention to instruct solicitors. Experience shows that most of these loans are resolved with the threat of legal action, without having to escalate further. Please feel free to let me know if you have any further questions. Best, Vanessa
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Post by vanessaiman on Feb 2, 2017 11:19:13 GMT
One of the concerns I've been mulling over last few days with OC is the diversification. I have a few that are close to or at 10% of my portfolio and many at 5% or so. 10% seemed high to me given we (I) generally aim for 2% or so elsewhere, though OC's really a bit of a different asset class , so I did some (worst case?) napkin calcs Max %10 of total amount invested in any one loan (OC states) assume 55% recovery (LTV are max 70%, 5% first loss by OC) on 20k portfolio 2,000 in any one loan loss of 45% of home value = 15% loss of loaned capital - 5% OC first loss = 10% = £200 loss after recovery 20k portfolio @ 4.7% per year yields £960 a year So a loss a year brings the rate down to around 3.8% Anyone seem a major flaw in my scribbling? I'm pretty sure I have seen a little juggling of my loans soon after investment before, and they do state they will try and diversify you if there is a need, so I hope this does get done in the future. I think if the above calc is good, I'm happy. I have 42 loans in my collection at the moment. Hi Mousey_saver , Just a recap on our current diversification policy, in case useful. As you say, we'll always try and invest your money across 10 loans or more (and will hold it in a queue if we can’t do that). We think, given the asset-backed nature of the loan and our own first loss co-investment which you mention, this offers a very strong level of diversification. But, as you hinted at, it’s possible that your portfolio could become more concentrated over time – for example if loans get repaid, and the money that was previously allocated to them gets reinvested into loans that are already in your portfolio. With that in mind, we may automatically balance out your portfolio if more than 10% is held within a single loan. We’ll do this by buying back your investments and spreading them out again across the loans you were previously invested in, plus enough new ones to ensure you’re sufficiently ‘diversified’. Please feel free to let me know if you have any further questions. Best, Vanessa
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littleoldlady
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Post by littleoldlady on Feb 2, 2017 19:11:11 GMT
Is the queue length visible on the site anywhere? I put in a chunk which was invested almost immediately so I sent in a second chunk but that has not been invested yet.
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pauls
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Post by pauls on Feb 2, 2017 19:20:34 GMT
Is the queue length visible on the site anywhere? I put in a chunk which was invested almost immediately so I sent in a second chunk but that has not been invested yet. From your dashboard click the green INVEST button. Next screen has a banner saying something like " ... there are currently nn loans available at an average rate of xx ..." Previously this had a statement of how long the queu was in days/weeks. I too had rapid deployment and then had my monthly deposit. This is still waiting. I suspect the start of the month may be a busy period with other investors doing a monthly deposit. (ooooh errr)
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littleoldlady
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Post by littleoldlady on Feb 2, 2017 19:27:47 GMT
Is the queue length visible on the site anywhere? I put in a chunk which was invested almost immediately so I sent in a second chunk but that has not been invested yet. From your dashboard click the green INVEST button. Next screen has a banner saying something like " ... there are currently nn loans available at an average rate of xx ..." Previously this had a statement of how long the queu was in days/weeks. I too had rapid deployment and then had my monthly deposit. This is still waiting. I suspect the start of the month may be a busy period with other investors doing a monthly deposit. (ooooh errr) I expect that I am already in all the open loans from my first chunk so none of the second chunk is going in and we have a queue again.
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bigfoot12
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Post by bigfoot12 on Feb 2, 2017 21:19:51 GMT
With that in mind, we may automatically balance out your portfolio if more than 10% is held within a single loan. I'd feel much more comfortable if this number was 5% instead of 10%. I'm adding money to your site more slowly at the moment to try to make sure it is spread out. I'd add more if I was sure of more diversification. BTW I think that your favicon looks more like a skull and crossbones than an octopus!
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pom
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Post by pom on Feb 3, 2017 9:09:32 GMT
Is the queue length visible on the site anywhere? I put in a chunk which was invested almost immediately so I sent in a second chunk but that has not been invested yet. When did you send it? I get the impression someone has to click a button to invest stuff, so maybe it arrived just too late?
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littleoldlady
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Post by littleoldlady on Feb 3, 2017 9:46:30 GMT
Is the queue length visible on the site anywhere? I put in a chunk which was invested almost immediately so I sent in a second chunk but that has not been invested yet. When did you send it? I get the impression someone has to click a button to invest stuff, so maybe it arrived just too late? Still pending this morning. Edit: then a few mins later all invested, so looks like pom is right.
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pom
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Post by pom on Feb 3, 2017 10:34:48 GMT
When did you send it? I get the impression someone has to click a button to invest stuff, so maybe it arrived just too late? Still pending this morning. Edit: then a few mins later all invested, so looks like pom is right. It's easy to forget sometimes that some people only want to work "normal" hours... bloody part-timers!!
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Post by vanessaiman on Feb 6, 2017 16:01:08 GMT
Hi All, As a few of you have remarked, our investments can take a little time to process – as you can imagine we sometimes have a lot of pending orders which the system has to work through. And you're quite right, pom, some orders just miss our cut off period. We process orders Monday-Friday, 8am-3pm – any investments that are requested 'out of hours' are tackled on a first-come, first served basis once we resume trading. Last week, we also had a few redemptions which meant things took a little longer to process. Please do let me know if you have any further questions. Best, Vanessa
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bigfoot12
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Post by bigfoot12 on Feb 8, 2017 8:43:48 GMT
...which meant things took a little longer to process. Yes things were much slower taking nearly 2 hours to get fully invested instead of 10 minutes at the start of last week!
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ilmoro
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Post by ilmoro on Feb 8, 2017 20:13:45 GMT
I think its time that Octopus Choice amended its misleading advertised target rate. The current rate is displaying 4.7% and looking at jonah's rate tracker has been at that level all day. I invested cash last night which was placed into loans this morning at an average rate of 4.4%. Checking the loan book for avaliable loans (unchanged from yesterday) the average rate achievable if my money had been invested equally in the 20 loans with the highest rates (with sufficient avaliability) would have been 5.3%, so achieving 4.7% shouldnt have been an issue. Advertising a target rate which can be achieved by their system algorithms and then failing to achieve that rate is in my opinion misleading. (Had the rate not been achieved due to loans no longer being available, fair enough that the luck of the draw but that doesnt appear to be the case). No more money from me. vanessaiman
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littonowl
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Post by littonowl on Feb 9, 2017 12:57:50 GMT
Yeah, in my experience of drip-feeding money in, I'm always about 0.2% down on the advertised target rate at the time of investment, don't think I've beaten it once.
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