jjc
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Post by jjc on Nov 18, 2017 19:13:19 GMT
Picking up on r00lish67’s scenarios & mikes1531's useful “If I were in charge…” suggestions A possibly not immaterial (& maybe complicating) factor to how this loan is handled, & the impact it has on FS, may lie in the FS directors’ shareholdings, & their individual plans for the future. There has been some rebalancing of shareholdings over the years, the last of which following the withdrawal of one of the 2 founders (& main early-day investor) from ops end of last year when he cashed in some of his shares to launch a new venture - details of which we were told “would be announced at a later date”, but tmk not subsequently followed through on. If (as appears quite likely) FS will have to make good on Whitehaven to some extent or another at some point, were there to be any “discussions” amongst the shareholders as to any apportioning of responsibility for the hole in the wall situation that has arisen (perhaps also likely if the sum is unlikely be a small one?), it could conceivably lead to discrepancies (if not more serious consequences) amongst the stakeholders as to how the matter should be handled. Without knowing the ins & outs as to how this loan came to FS, who was formally handling it, let alone whether this has any bearing on director remuneration etc, from correspondence received it would seem the loan was not the responsibility (at least in spring 2016 shortly after the initial tranche went live) of the director that left last year. If you were that director & were looking to cash in the remainder of your shares at a fair price reflecting the value of the work (& money) you had put into FS, how would you be looking at the situation on this loan? Or more simply, if you were looking to cash in your holding (eg to fund your new venture), what impact might this have on FS’ ability to deal with both your request & any that might arise on Whitehaven in the short term? I hope that a swift gentlemanly (& agreeable to all) solution can be found to these & any other related issues. We're likely talking about a 6 figure sum for the departed director, not peanuts & hence possibly not immaterial.. Which is a long way of saying that whilst I think there is much merit to mike’s suggestion to knock things on the head & deal quickly with Whitehaven, I’m not sure this will be realistically possible (or at any rate simple). Cash is gold-dust for young growing companies, this is a problem FS could well have done without.
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jjc
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Assetz Capital (AC)
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Nov 17, 2017 19:09:09 GMT
trouble likes this
Post by jjc on Nov 17, 2017 19:09:09 GMT
As an amusing (or possibly infuriating) anecdote this loan should have a 3M buffer, from which payment surely (now nearly 3W late on last due payment) should have been advanced (isn't that's what it's for)?
I get the stickler for the rules/pertinence argument, but shouldn't it cut both ways (even aside from the fairer together slogans)?
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jjc
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Post by jjc on Nov 7, 2017 16:22:16 GMT
Agreed the £2.5m guide price does look a bit low, but it’s only a starting point (presumably to attract the 60+ interested parties who will ratchet things up significantly). The bids only need to raise the price 25% & we’re at the 6M RMV (& well over what we need for a full recovery of capital & juicy default interest), nowt to be concerned about imv. FWIW this is a loan in which I rated the asset more worthy than the borrower/principal, & expected had a higher than average risk of default (but also lower LGD loss given default). Worth reading the various Administrator & Liquidator etc reports on Sub****tia Invest, & 2 SPV’s with hotel options in their name for background into the (usual?) MO of the principal. A number of CH entries so you’ll need to use the search box. None of that put me off because I considered the security to be solid. It’s a nice hotel & restaurant in an affluent & pretty village that, prior to our borrower, had been owned for many decades by one family. Rightly or wrongly when the loan was launched I considered it likely that this long-time single ownership & lack of similar established hotels in attractive locations being available on the market would result in strong (& perhaps pent-up) demand from buyers, should our loan default. The 2 offers received already during term so far (without any marketing iws?) & the 60+ parties now lining up would seem to support that view. Always worth waiting for the chickens to hatch before making a call, but to my mind there are loans with far worse recovery prospects than this pretty lil hotel. If it wasn’t suspended I’d likely be buying (possibly much) more. On ptr120’s question MT have a debenture so in control of things, would expect any profits (unlikely given the redundancies?) to be used as indicated by jlend.
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jjc
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Post by jjc on Nov 7, 2017 13:13:36 GMT
Upcoming loan 572 a similar story. In this case it’s the borrower, & if a Lancashire Post article is the one referred to in the CR (the dates & names fit in) appears to relate to 4 counts of theft (for £34k) from his employer. This appears to have been found by AC’s dd (which is encouraging) & included in the CR together with at least some points addressed by the borrower (also encouraging). Slightly confused as to the relevance of the claimed return to work with the Armed Forces (which, according to the press article, was not who he worked for at the time of the reported incidents.) On andrewholgate ’s comment & the standard opening CR note as to AC’s disclosure policy, & mikes1531 ’s (imv fair) related concerns I would hope that, if implemented rigorously, this disclosure policy should be enough. If the adverse info is offered voluntarily by the borrower (& AC commits to disclosing this – that’s the key point) then the borrower is committing to the info being “complete, accurate & correct”. If the info has been uncovered by AC’s duedil (& again, crucially, AC commits to disclosing this in some shape or form) then lenders again should have enough to be able assess things properly, though the word “complete” is one AC & the borrower will need to keep an eye on. There are many ways disclosure can be made whilst remaining within bounds of reasonableness that anyone except the most recalcitrant of borrowers would surely find acceptable. I am less convinced as to the commercial environment argument which, whilst a reality, omits to mention AC are already profitable, claim to have monthly loan enquiries & pipeline in the hundreds & tens of millions of £ respectively, are iws well on their way to squeezing much more profitability out of their business model in future, offering secured loans at 5-7% (to lenders in any case) below most of the competition, & last but not least surely have an interest in maintaining their good name as a platform dealing with (largely) lower-risk borrowers. Like (I expect) many lenders here I personally don’t have an issue with lending to borrowers with prior adverse history, as long as I feel I am being provided with sufficient information to be able to assess things properly. Assetz have been better than most/everyone at that so far & I expect them to keep to these higher standards. jestful (temp) tagline in modest tribute to peerlessperil's (usually) more sensible advice
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jjc
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Post by jjc on Nov 6, 2017 20:53:24 GMT
The figs I've quoted are all from filed CH accounts. You've missed them. Have PM'd you separately explorep2p but please check your info is correct & complete & post here again if poss with the revised figs. You're covering important ground missed by others here & offering analysis on the results you report, but from the little I've seen the raw data you're reporting is (at least sometimes) incomplete if not also incorrect. Thanks
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jjc
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Post by jjc on Nov 6, 2017 18:40:04 GMT
Thanks explorep2p . If possible for your next update would appreciate you asking those platforms who wish to reveal it what their revenue was. This the most useful single additional parameter to enrich your data. I appreciate some/many won’t at first nudge be looking to disclose this, but if you can get some on-board it might get others to too. Only looked at one (FS) btw but they have theirs disclosed at YE 6/16 (£2.144m). Edit: Zopa too (£33.22m). Bit sloppy guys at explorep2p, is it you that are doing the exploring or us that ought to be exploring your explorations? Sorry, raises questions as to your (hopefully) otherwise useful, & much appreciated, contributions here Edit2: it seems you are reporting post-tax profits (from a kwik glance at RS & FS). I think pre-tax is more useful & relevant to us, perhaps worth adjusting? (In RS case loss due to a significant tax credit increases to £5m, in FS case profit increases by a sizeable 40% to £550k.)
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jjc
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Post by jjc on Nov 4, 2017 17:02:20 GMT
What’s not clear to me is whether this AI product would run alongside the existing manual lending option, or look to replace it. Also unclear is whether the AI would run on the platform or off it (in the latter case, for example, as a bond.) I see these as important to clarify, as aside from the fact I would be unlikely to invest in a 3-5Y bond (issued by any p2p platform), the answers might reveal more as to LY’s prospects of getting full FCA authorisation, their willingness/ability to invest in their IT, & short-mid term platform risk.
Clearly the big retail money is in auto-invest type products, & LY would - to be frank - be commercially irresponsible not to consider this route. I am happy that LY are considering this, particularly if as a supplement to manual lending (which I am open to continue contemplating.) If the answers LY get from most/almost all forum members are a flat negative that would (imv) likely encourage them to scrap manual lending & go down the AI-only route, which to my mind adds zero value to most of us here.
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jjc
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Post by jjc on Oct 29, 2017 13:34:46 GMT
Not easy to discuss things here so FWIW just some brief points. 1. The Gazette notice I take to be positive news for us lenders & our borrower (which is why he’s doing it) 2. Nothing that I have read on this thread* has had even the most minimal effect on altering my personal view (formed several months ago**) that this loan is priced accurately (if not slightly generously) wrt to the intrinsic risk of the proposal we were offered to lend on. I was always more concerned about the liquidity risk of this loan, once certain aspects emerged. I perceived this liquidity risk to be high based on a. the very high likelihood (certainty really) that something would emerge b. the very high likelihood (sigh, certainty really) that whatever did emerge would be misunderstood, & incorrectly “priced” by investors on a par SM (ie shed loads would be dumped) c. the certainty that a sheeple effect would then kick in, as other investors who have not done any research panic & follow the herd onto the SM, whilst still others (who might have done excellent/good/poor research) put some or all of their holdings up for sale, as they have nothing to lose from doing so Because I attach some (if probably less than most other investors) value to liquidity I hold a smaller than average stake in this loan. Should certain things play out as I am expecting them to in coming weeks I will probably up my stake considerably, on the basis that for a number of (good & daft) reasons both the credit & liquidity risks to this loan will have significantly improved. A long way of saying this is actually a considerably better loan (imv) than many people seem to perceive it to be. Usual disclaimers, not investment advice, dyor gawd bless us all & shpeshally the sheeple etc * Much of which is plain wrong (as should become clearer to intelligent posters – as I take them to be – once they have had time to digest things properly & join all the dots the right way) ** p2pindependentforum.com/post/224795/thread hints here as to the likely time/effort taken to form this view
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jjc
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Post by jjc on Oct 27, 2017 6:08:44 GMT
Welcome fogey . Wrt the last bit of your last sentence I suspect the answer is in the last sentence of your first para, but despite having it under your nose you make yourself trip over paying too much attention (or giving too much weight) to your first phrase & in particular your second sentence. All is not lost, your second (post colon) phrase belies a lucidity & determination that is the solution to many things (including your seventh sentence in the third para). If you’ve got as far as that, & are still smiling, you are as able as anyone to join the dots that make up (a bit of blood, sweat & tears aside) most of what is needed for dd. It’s really not that hard. For my part I have enjoyed many of your posts, as always we’re all just guessing across the ether but it didn’t seem to take too much joining of dots (on any of your posts) to spot a sharp & humorous take on things which often had me (& presumably many others) a-chuckling. Fun & laffs an important part of everything so I thank you for that. I hope to continue reading you here, whatever you decide to do with your possibly exceptional, if to date perhaps insufficiently employed, dd skills. May I bid you farewell for now, before you start putting the first word in the penultimate line of this screen (the one with an exclamation mark) together with the last word of your post, the fourth word of your second para & the third word of your second sentence together & then hitting send. Because if you do that it’ll be a sure sign that's the end of you having much time to watch the SM, & we’ll sorely miss much of your wit. Welcome again fogey, good to have you here.
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jjc
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Post by jjc on Oct 26, 2017 23:18:49 GMT
Yep, folk easily spooked. I’ve seen the Gazette notice which, aside from being called voluntarily (by the director), looks to me to be a positive move. (This last personal opinion fwiw based on fairly lengthy research into dozens of entities & folk in closer & less close proximity to our borrower). No crystal ball, warranties (dyor), or much I can add but would guess a certain design consultancy is likely to take on a more important role in future.
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jjc
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Post by jjc on Oct 26, 2017 6:26:59 GMT
My views in line with others (time to view & fixed limits at Abl's discretion the only things I see a need for). Would caution strongly against auto-invest, anyone who uses (another once popular hi-rate manual lending platform) AC will know how this sucks the dumb money in, decimates allocations & drives rates down. We lenders end up with crumbs & fragments of low-yield stuff that might be easier/better to get on any other number of platforms/funds. Might make sense if you're looking to scale really big (in which case the whole business model needs to change drastically, from pre-origination & market positioning right down to the lender base), but unless I've missed something the opposite of what ablrate seem to have been aiming for to date (so bit surprised this is being contemplated)?
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jjc
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Post by jjc on Oct 25, 2017 17:36:18 GMT
It's been rubblised.Despite 2 or 3 reads of that I keep seeing "it's being rubbished" Please turn me over. Thanks for the pics, me quite happy when progress is being made.
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jjc
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Post by jjc on Oct 24, 2017 15:58:08 GMT
to be fair guys there were enough clues, Birkenhead & the recent Lambo made the same journey to default...
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jjc
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Post by jjc on Oct 22, 2017 10:40:11 GMT
For those that weren’t aware the borrower on this loan is aiui the same one as on the Scottish boatyard (one of FS’ early day HNW borrowers that was probably given too much credit / treated too leniently initially for this reason). Probably also why there were delays in the initial months on recovery of this loan, needing to secure title & handle delicately with the boatyard still in play. 09dolphin from the updates it does seem FS have been trying to sell the boats both individually & en bloc. These are specialist assets, & will not be easy to shift. I hope FS are doing their best. We cannot necessarily expect it but funding things like the advertising costs would be a welcome gesture. FS have, you would think, done better out of this borrower than us lenders.
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jjc
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Post by jjc on Oct 17, 2017 15:02:36 GMT
To bring up another point that hasn't yet been covered. If I haven't missed something the valuation is based on the residual value of the project, with comparables used to estimate the GDV. Additionally, if I haven't missed anything, there's no planning permission, not even outline planning permission. In my opinion this means that a planning risk discount needs to be applied to the valuation. An allied point is why does the borrower need the money now? He has already paid for it and cannot start work on it until when and if he gets PP. Perhaps he needs it for another project? We have seen this before. Quite a few other projects they have on atm (& an upcoming biggie in Manchester with almost identical timelines to this one, which might well pose challenges), check out their website. I started looking at things earlier to get a wider view of the group's projects, gearing & likely cashflow situation, but have put all on hold now. There are questions that need to be answered before any more dd is done on this (imo).
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