invester
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Post by invester on May 21, 2018 9:16:32 GMT
Thread not designed to be a dig or a downer on investment, but just curious as to what people's estimates are. Appreciate longer term investors may have an actual figure but I feel this may have been skewed by the old rules, and that interest was always paid whether on account or not.
For an investor diversifying an equal amount into every loan going forward I think the average gross return will be around 11%. But there are two threats to return, one being the fact that a late loan pays no interest and the second being defaults losing all accrued interest and capital. The very bad loans have a triple whammy effect, because they take a huge amount of time to sort out (not earning any interest), a drawn out loan decreases the chances of the accrued interest being paid (ie on a £5m loan late by 2 years, default is easier), and a capital loss on finalisation.
Even allowing for the rate of non-performing loans to go down a little in future IMO an investor taking all the loans ends up with an effective rate less than that of the 5-year market in Ratesetter.
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r00lish67
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Post by r00lish67 on May 21, 2018 9:46:17 GMT
I'm not sure that we can really construct anything meaningful at the moment, just as Lendy have only launched 2 new loans (i.e. not new DFL tranches) in the past couple of months I think - PBL199 and PBL200.
PBL200 hasn't yet drawn down, and PBL199 is yet to fill (2.5 months and counting). So at this rate, if you're talking about only investing going forwards, then I don't think diversification is really even an option at the moment and a relevant % number would be subject to huge variation depending on timing of a new investor starting.
If we were to assume a new investor has no exposure to existing DFL's and include new tranches of those - well, I don't think Lendy have ever actually finished one yet, so it's going to be a bit difficult to try and guess how they'll do with future iterations.
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hazellend
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Post by hazellend on May 21, 2018 10:48:38 GMT
Thread not designed to be a dig or a downer on investment, but just curious as to what people's estimates are. Appreciate longer term investors may have an actual figure but I feel this may have been skewed by the old rules, and that interest was always paid whether on account or not. For an investor diversifying an equal amount into every loan going forward I think the average gross return will be around 11%. But there are two threats to return, one being the fact that a late loan pays no interest and the second being defaults losing all accrued interest and capital. The very bad loans have a triple whammy effect, because they take a huge amount of time to sort out (not earning any interest), a drawn out loan decreases the chances of the accrued interest being paid (ie on a £5m loan late by 2 years, default is easier), and a capital loss on finalisation. Even allowing for the rate of non-performing loans to go down a little in future IMO an investor taking all the loans ends up with an effective rate less than that of the 5-year market in Ratesetter. I don’t take every loan but ratesetter does not come close.
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Post by p2plender on May 21, 2018 11:51:40 GMT
"For an investor diversifying an equal amount into every loan going forward I think the average gross return will be around 11%."
Wow!!
If you'd lose a '1' then I would still probably say....
Wow!
I think a very low paying current account will see a better return.
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SteveT
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Post by SteveT on May 21, 2018 13:02:14 GMT
I still think 8% net return (after bad debts) is a fair assumption for an actively managed P2P portfolio on Lendy, MoneyThing, Ablrate and BridgeCrowd, by which I mean doing enough basic DD and monitoring of updates to steer around the more obvious landmines.
My historic XIRRs on those 4 platfoms (over 3+ years) are 12.4%, 12.8%, 13.5% and 11.9% respectively, but that really reflects the fact that 2014-16 was a "golden period" for P2P lending and even 2017 was pretty benign. However I've done less well on Funding Secure (7.6%) and exited ReBS by the skin of my teeth at around 8%. Assetz is somewhere in the middle at 11%, but my loan book there is shrinking as older, better rate loans repay.
I've no reason to think that forward-looking returns at Lendy will be much different from the other comparable asset-secured P2P platforms (eg. MoneyThing, Ablrate, Bridgecrowd). All have made mistakes in the past and all have learned lessons for the future. However I'm concerned about the medium-term viability of Funding Secure if they don't start investing more seriously in recovering their extensive portfolio of zombie loans, so I'm withdrawing repayments there as they arise.
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Post by p2plender on May 22, 2018 0:46:31 GMT
Am I the only one shocked that after the state of the Lendy loan book, people are still willing to invest?
Each to their own but I'm dismayed, especially given how the loan book has faired in benign times. I couldn't start to imagine what things would be like if the general economy/housing market had struggled/reversed. Things may get very interesting now that Russian money could be getting repatriated..
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cwah
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Post by cwah on May 22, 2018 7:29:55 GMT
I still think 8% net return (after bad debts) is a fair assumption for an actively managed P2P portfolio on Lendy, MoneyThing, Ablrate and BridgeCrowd, by which I mean doing enough basic DD and monitoring of updates to steer around the more obvious landmines. My historic XIRRs on those 4 platfoms (over 3+ years) are 12.4%, 12.8%, 13.5% and 11.9% respectively, but that really reflects the fact that 2014-16 was a "golden period" for P2P lending and even 2017 was pretty benign. However I've done less well on Funding Secure (7.6%) and exited ReBS by the skin of my teeth at around 8%. Assetz is somewhere in the middle at 11%, but my loan book there is shrinking as older, better rate loans repay. I've no reason to think that forward-looking returns at Lendy will be much different from the other comparable asset-secured P2P platforms (eg. MoneyThing, Ablrate, Bridgecrowd). All have made mistakes in the past and all have learned lessons for the future. However I'm concerned about the medium-term viability of Funding Secure if they don't start investing more seriously in recovering their extensive portfolio of zombie loans, so I'm withdrawing repayments there as they arise. I actually shifted most of my loans from lendy to funding secure as lendy has load of default and funding secure much less. They also value properties based on their current value instead of GDV, which is absurd because if borrower doesn't complete development it's a complete loss. What are the zombie loans from funding secure? I may have missed something
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r00lish67
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Post by r00lish67 on May 22, 2018 7:42:57 GMT
I still think 8% net return (after bad debts) is a fair assumption for an actively managed P2P portfolio on Lendy, MoneyThing, Ablrate and BridgeCrowd, by which I mean doing enough basic DD and monitoring of updates to steer around the more obvious landmines. My historic XIRRs on those 4 platfoms (over 3+ years) are 12.4%, 12.8%, 13.5% and 11.9% respectively, but that really reflects the fact that 2014-16 was a "golden period" for P2P lending and even 2017 was pretty benign. However I've done less well on Funding Secure (7.6%) and exited ReBS by the skin of my teeth at around 8%. Assetz is somewhere in the middle at 11%, but my loan book there is shrinking as older, better rate loans repay. I've no reason to think that forward-looking returns at Lendy will be much different from the other comparable asset-secured P2P platforms (eg. MoneyThing, Ablrate, Bridgecrowd). All have made mistakes in the past and all have learned lessons for the future. However I'm concerned about the medium-term viability of Funding Secure if they don't start investing more seriously in recovering their extensive portfolio of zombie loans, so I'm withdrawing repayments there as they arise. I actually shifted most of my loans from lendy to funding secure as lendy has load of default and funding secure much less. They also value properties based on their current value instead of GDV, which is absurd because if borrower doesn't complete development it's a complete loss. What are the zombie loans from funding secure? I may have missed something Go to Members -> Adrian77 -> View this member's recent posts. Tip: don't invest in loans Adrian invests in 
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hazellend
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Post by hazellend on May 22, 2018 7:43:20 GMT
Am I the only one shocked that after the state of the Lendy loan book, people are still willing to invest? Each to their own but I'm dismayed, especially given how the loan book has faired in benign times. I couldn't start to imagine what things would be like if the general economy/housing market had struggled/reversed. Things may get very interesting now that Russian money could be getting repatriated.. No offence but you seem like somebody whose default setting is shocked. Lendys current non defaulted loan book looks quite good to me for a new comer looking to diversify
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SteveT
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Post by SteveT on May 22, 2018 7:55:34 GMT
I actually shifted most of my loans from lendy to funding secure as lendy has load of default and funding secure much less. They also value properties based on their current value instead of GDV, which is absurd because if borrower doesn't complete development it's a complete loss. What are the zombie loans from funding secure? I may have missed something Go to "All Active and Past Loans" page. For those formally defaulted by FS, simply search for "Unredeemed". To locate the various others that FS have STILL not yet formally defaulted, you can either copy & paste the whole loan book into Excel and sort for the oldest loans that are still "Loan Active" (ie. earliest "Active From" date), or else sort the page by "Last Updated" and check recent updates on loans that have "Active From" dates of 2016 / early 2017.
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Post by Ace on May 22, 2018 8:01:22 GMT
Am I the only one shocked that after the state of the Lendy loan book, people are still willing to invest? Each to their own but I'm dismayed, especially given how the loan book has faired in benign times. I couldn't start to imagine what things would be like if the general economy/housing market had struggled/reversed. Things may get very interesting now that Russian money could be getting repatriated.. No offence but you seem like somebody whose default setting is shocked. Lendys current non defaulted loan book looks quite good to me for a new comer looking to diversify Most loan books look fairly rosy if you ignore the defaults, but the number and state of the defaulted loans is one of the best indicators we have as to how well a platform does DD and whether the rosy loans are likely to turn a tad ugly.
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dovap
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Post by dovap on May 22, 2018 8:03:22 GMT
Am I the only one shocked that after the state of the Lendy loan book, people are still willing to invest? Each to their own but I'm dismayed, especially given how the loan book has faired in benign times. I couldn't start to imagine what things would be like if the general economy/housing market had struggled/reversed. Things may get very interesting now that Russian money could be getting repatriated.. No offence but you seem like somebody whose default setting is shocked. Lendys current non defaulted loan book looks quite good to me for a new comer looking to diversify I'd be surprised if Lendys current default/suspended junk didn't look good to you at the time as well tbh. The current offerings don't seem any less likely to suffer the same fate as the current raft of junk imho each to their own though
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hazellend
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Post by hazellend on May 22, 2018 8:05:24 GMT
No offence but you seem like somebody whose default setting is shocked. Lendys current non defaulted loan book looks quite good to me for a new comer looking to diversify Most loan books look fairly rosy if you ignore the defaults, but the number and state of the defaulted loans is one of the best indicators we have as to how well a platform does DD and whether the rosy loans are likely to turn a tad ugly. I disagree. The past is not an indicator as there is survival of the best loans and Lendy appears to be beefing up its recovery team. Also, Lendy will know now that there is no chance of getting a non decent loan funded in the current climate.
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hazellend
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Post by hazellend on May 22, 2018 8:07:19 GMT
Most loan books look fairly rosy if you ignore the defaults, but the number and state of the defaulted loans is one of the best indicators we have as to how well a platform does DD and whether the rosy loans are likely to turn a tad ugly. I disagree. The past is not an indicator as there is survival of the best loans and Lendy appears to be beefing up its recovery team. Also, Lendy will know now that there is no chance of getting a non decent loan funded in the current climate. I do think perhaps the P2P world is not quite ready for the DFL model and we need to go back to PBL
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p2p2p
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Post by p2p2p on May 22, 2018 8:48:27 GMT
At least with a PBL the borrower knows quickly whether his funding is viable. No take-up, go elsewhere. For a DFL, tranche 1 may be oversubscribed, the excess demand and new people may fill tranche 2, but by the time you get to tranche 4 everyone has enough, and the builders have dug a large hole and need funds to build out of it. And that's not easily predictable.
As far as rates of return go, so few platforms seem to make it easy to see, with all the money sloshing back and forth. At least FC have a clear number on my dashboard, 5.4%
Lendy's reluctance to declare any loan in default makes their tax statement little use in this regard.
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