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Post by GSV3MIaC on Apr 5, 2019 12:33:34 GMT
At a 10% discount and they are going to wind it up, surely this is a good buy? /mod hat off
Use of 'surely' in relation to P2P / FC / investments in general is 'surely' an oxymoron?
The discount could be higher tomorrow, and we have no idea how long, and what cost, wind up will take. Pass...
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cobi
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Post by cobi on Apr 5, 2019 14:39:04 GMT
surely: used to emphasize the speaker's firm belief that what they are saying is true and often their surprise that there is any doubt of this.
From my point of view I think I used the term correctly. I was NOT saying this is a sure-fire bet and added a question mark to emphasis this.
As you say the discount could get bigger and the costs of winding up could be large. The share price has not moved much today so I may be in the minority, time will tell.
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Post by nooneere on Apr 5, 2019 17:09:13 GMT
Back on 18 Feb in the thread "FC Performance in 2018" I made the comment that "FC face a double-whammy of stockmarket scrutiny post-IPO. FCIF, which has a (theoretically) independent board, will be providing regular reports on loans performance that will be monitored by analysts of Funding Circle PLC. Their management will be in trouble like any PLC if they don't improve, and not just from P2P Independent Forum..." Next thing you know they shut down FCIF ... hmm. Also an article on this here: www.p2pfinancenews.co.uk/2019/04/05/funding-circle-investment-trust-to-close-as-p2p-lender-unveils-new-institutional-funds/I bet their "new institutional funds" will lack the public scrutiny of a PLC. |
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benaj
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Post by benaj on Apr 6, 2019 9:01:01 GMT
So, would closing down FCIF cause sale delay on FC itself? It’s s going to br a massive chunk to off load in the SM, and I can’t imagine FC slowing down issuing new loans
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SteveT
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Post by SteveT on Apr 6, 2019 11:55:08 GMT
So, would closing down FCIF cause sale delay on FC itself? It’s s going to br a massive chunk to off load in the SM, and I can’t imagine FC slowing down issuing new loans Most unlikely that FCIF loans would be sold to retail lenders via the FC SM. FCIF invests in whole loans and so is more likely either to wait for borrowers to repay or sell part / all of its loan book to another institutional investor.
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zlb
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Post by zlb on Apr 10, 2019 11:57:33 GMT
So, would closing down FCIF cause sale delay on FC itself? It’s s going to br a massive chunk to off load in the SM, and I can’t imagine FC slowing down issuing new loans Most unlikely that FCIF loans would be sold to retail lenders via the FC SM. FCIF invests in whole loans and so is more likely either to wait for borrowers to repay or sell part / all of its loan book to another institutional investor. That would take some time? They are supposed to be launching replacement "two new institutional funds" (p2p Finance News) - so would those funds buy up the FCIF content?
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sl75
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Post by sl75 on Apr 17, 2019 15:07:16 GMT
In line with what was said would happen a few posts ago, I just noticed the following notification from 12 April:
"Funding Circle SME Income Fund Limited is proposing an orderly winding down of the company, subject to shareholder approval upcoming Extraordinary General Meeting (EGM). This would involve the Company`s portfolio being realised and not reinvested, with a corresponding change being made to the Company`s investment policy." It's not entirely clear to me whether "realised" means "repaid according to the normal schedule" or "sold at market value", or even "sold at knock-down prices to ensure that we can fully liquidate as soon as possible"... i.e. whether the "orderly winding down" is a process expected to take several years to complete (as has been happening and continues to happen with my personal FC account despite making no new loans for nearly 4 years, and liquidating all I was able to more than 3 years ago), or one that will be rushed through by selling distressed loans at however many pence in the pound, and even selling "good" loans at a discount, resulting in crystallising losses to investors but allowing those who buy the distressed loans to profit over the course of several years; or perhaps some combination of these according to what provides best value in each case.
In any case, at a first glance, it looks to be trading at a price significantly below what would be implied by the claimed net asset value, so if those assets can in fact be "realised" for anything close to the claimed value, I can see why liquidation would be an attractive option, and even if they can't be liquidated for cash in the short term, they seem to be buying back their own shares at a not inconsiderable rate (around 400,000 per day recently representing a daily buy-back of more than 1/800 of the shares in issue!), which presumably increases the net asset value for the remaining shares in issue, and could do so more quickly than investing cash into new FC loans for as long as they continue to trade significantly below NAV.
[NB In case it's not clear from the above, I have an interest in these shares]
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ashtondav
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Post by ashtondav on Apr 17, 2019 15:22:42 GMT
It will be one or both of the latter options. They will sell everything and wind up the IT. FC have announced it has other institutional investors lined up.
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zlb
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Post by zlb on May 16, 2019 8:01:20 GMT
At a 10% discount and they are going to wind it up, surely this is a good buy? I'm a newbie, I can see that they are doing a lot of buy back. But why is it a good buy if sold at discount? I've read elsewhere (the other day, sorry can't remember where) that it's the investors directly through (any) p2p model rather than share holders in the fund related to the platform, who would get their money back first.
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SteveT
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Post by SteveT on May 16, 2019 9:04:27 GMT
At a 10% discount and they are going to wind it up, surely this is a good buy? I'm a newbie, I can see that they are doing a lot of buy back. But why is it a good buy if sold at discount? I've read elsewhere (the other day, sorry can't remember where) that it's the investors directly through (any) p2p model rather than share holders in the fund related to the platform, who would get their money back first. I think you're confusing direct P2P lending via FC itself with owning shares in the FCIF investment trust. FCIF holds whole loans, bought direct from FC, so there are no individual P2P lenders in those loans, only the FCIF shareholders themselves. If you buy investment trust shares at, say, a 10% discount to NAV (net asset value per share) then, in theory, you are paying 90p now for a share of assets that should ultimately be worth 100p. Maybe. If the assumptions made in estimating the NAV are correct. Especially, in this case, if the fund is to be wound up or sold to an external buyer (I'd imagine such a buyer is unlikely to want to pay full NAV for the remaining loans). Lots of uncertainty!
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zlb
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Post by zlb on May 16, 2019 9:27:55 GMT
I'm a newbie, I can see that they are doing a lot of buy back. But why is it a good buy if sold at discount? I've read elsewhere (the other day, sorry can't remember where) that it's the investors directly through (any) p2p model rather than share holders in the fund related to the platform, who would get their money back first. I think you're confusing direct P2P lending via FC itself with owning shares in the FCIF investment trust. FCIF holds whole loans, bought direct from FC, so there are no individual P2P lenders in those loans, only the FCIF shareholders themselves. If you buy investment trust shares at, say, a 10% discount to NAV (net asset value per share) then, in theory, you are paying 90p now for a share of assets that should ultimately be worth 100p. Maybe. If the assumptions made in estimating the NAV are correct. Especially, in this case, if the fund is to be wound up or sold to an external buyer (I'd imagine such a buyer is unlikely to want to pay full NAV for the remaining loans). Lots of uncertainty! I don't think I am confusing the two actions. The article or comment (maybe on this forum) may have been confusing them, perhaps. This is what they are doing at the moment. Would this be to artificially bolster the share price, or does this ultimately help investors in the fund? investing.thisismoney.co.uk/rns/fcif
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SteveT
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Post by SteveT on May 16, 2019 9:41:59 GMT
I think you're confusing direct P2P lending via FC itself with owning shares in the FCIF investment trust. FCIF holds whole loans, bought direct from FC, so there are no individual P2P lenders in those loans, only the FCIF shareholders themselves. If you buy investment trust shares at, say, a 10% discount to NAV (net asset value per share) then, in theory, you are paying 90p now for a share of assets that should ultimately be worth 100p. Maybe. If the assumptions made in estimating the NAV are correct. Especially, in this case, if the fund is to be wound up or sold to an external buyer (I'd imagine such a buyer is unlikely to want to pay full NAV for the remaining loans). Lots of uncertainty! I don't think I am confusing the two actions. The article or comment (maybe on this forum) may have been confusing them, perhaps. This is what they are doing at the moment. Would this be to artificially bolster the share price, or does this ultimately help investors in the fund? investing.thisismoney.co.uk/rns/fcifIt's a logical way of returning available cash to existing FCIF shareholders who are wanting / willing to sell now. FCIF presumably is no longer buying new loans from FC but will be receiving flows of capital and interest from those it already holds. The effect of any large-scale willing buyer in the market tends to support / boost the current share price. And the remaining shareholders should see a gradual increase in their NAV per share (if/when the repurchased shares are cancelled)
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cobi
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Post by cobi on May 22, 2019 7:51:57 GMT
Proposals for the wind down of FCIF have been released NOTICE OF EXTRAORDINARY GENERAL MEETINGIt is a continuation of dividends, ceasing share repurchase, and quarterly compulsory share redemptions. Potential portfolio sales by Funding Circle Global Partners Limited |
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sl75
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Post by sl75 on Jun 20, 2019 6:35:59 GMT
Fund was renamed: SME Credit Realisation Fund Limited (SCRF) (formerly Funding Circle SME Income Fund Limited) with the various resolutions for an orderly wind-down passing.
On one hand, this breaks ties with the Funding Circle brand (although "everyone" knows what it was).
NAV/share remains at about 95p after latest NAV report, way above market price, so either the NAV has been "optimistically" valued, or the market believes disposal costs will be unusually high.
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cobi
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Post by cobi on Jun 20, 2019 8:03:44 GMT
I am hoping that the NAV has been at least been fairly valued with the changes that were made to upfront impairment due to IFRS9 which impacted performance July 2018. The costs of winding down and whether they will sell some of the loan book on at discount are unknown and a risk. I still feel that this is a good bet and topped up yesterday at 80.8p.
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