sl75
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Post by sl75 on Jun 26, 2018 10:11:05 GMT
It seems to me that AC have started applying a 1% discount to brand new loan units created just after a loan goes live in at least some instances - having a similar effect as if they'd offered 1% cashback (except that there's no cash because AC "discounts" are actually implemented by giving you a larger holding than you paid for rather than a discount). This seems to be applied "fairly" - they're making the discounted loan parts available from the outset, so everyone gets the discount whether they asked for it or not, and this is how I first discovered it.
However, unlike other platforms that have given cashback/discounts, on new loans they're not mentioning it anywhere (other than on the statement if you were buying it anyway, or on the loan parts list if you hover over the amount available after the loan has already gone live).
It seems odd to me that an incentive like that would be run without advertising it - how are most investors supposed to be prompted to take the action that the cashback/discount is incentivising if they don't know about it?
In any case, having discovered this non-advertised effect, I've added further funds and created a load more buy orders for loans I was otherwise satisfied with my exposure to (including some which were close to my investment threshold but I would otherwise have had my intended exposure at zero), as I'm a bit of a sucker for discounts / cashback. However, my additional few £k aren't going to make a lot of difference on their own if attracting extra funds is part of AC's purpose behind doing this.
Perhaps others with a similar risk appetite might want to check this out for themselves and adjust their investment position accordingly.
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puddleduck
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Post by puddleduck on Jun 26, 2018 10:14:43 GMT
Yes, I've noticed the last 3 loans I've invested in on MLA have had 1% discount.
I see on 753 which just drew down yesterday there is just over 1k on the SM with the 1% discount, but 900k at the usual price.
So I'm not sure if this discount is via Assetz or maybe an underwriting offloading and queue jumping?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 26, 2018 10:37:59 GMT
Well that solves that mystery. Was trying to work out why funds in MLIA had increased for no reason. Seems to be a quirk of the system that the discount system generates a defacto cashback. Pretty sure it's underwriters selling down not AC.
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Post by chris on Jun 26, 2018 10:52:54 GMT
AIUI those discounts aren't being offered by AC but by underwriters who are free to discount as they see fit.
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bg
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Post by bg on Jun 26, 2018 11:14:48 GMT
Yes, I've noticed the last 3 loans I've invested in on MLA have had 1% discount. I see on 753 which just drew down yesterday there is just over 1k on the SM with the 1% discount, but 900k at the usual price. So I'm not sure if this discount is via Assetz or maybe an underwriting offloading and queue jumping? 753 actually drew with over £30k on a 1% discount. I don't know if that was bought or if the underwriter pulled it. 746, 581 and 730 are the other loans available at a discount. 404 is also available at a discount but I've had an order in to buy this for a day now but it still won't trade. It's so frustrating and I know it puts a lot of people off the platform.
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Post by crabbyoldgit on Jun 26, 2018 13:52:07 GMT
Hang on here ,ac using underwriters, I thought the short term access accounts were designed to push these people firmly into the past.However it seems not, so the question is, how big a short fall to fund new loans from lenders from the qaa and 30 day is there and how much and will interest rates have to rise to attract new funds. Yes please  bring it on. |
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Post by stuartassetzcapital on Jun 26, 2018 13:54:29 GMT
Its all part of our mix of funding. As will be further additions to our loan funding lines in due course. Its about our continuing growth and diversification of our funding lines.
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puddleduck
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Post by puddleduck on Jun 26, 2018 14:15:26 GMT
Yes, I've noticed the last 3 loans I've invested in on MLA have had 1% discount. I see on 753 which just drew down yesterday there is just over 1k on the SM with the 1% discount, but 900k at the usual price. So I'm not sure if this discount is via Assetz or maybe an underwriting offloading and queue jumping? 404 is also available at a discount but I've had an order in to buy this for a day now but it still won't trade. It's so frustrating and I know it puts a lot of people off the platform. As a test I asked the system to buy a small amount on 404 just after reading your post, and this 'buy; happened at 15:07 today. Are you sure you've not forgotten to tell the system to ignore monitoring events and credit events? Nevertheless I do agree - sometimes the system just doesn't buy, I've had a buy order for the last 4 or 5 days, the SM hasn't moved AT ALL, the availability is the same as when I placed my order. That must be immensely frustrating for whoever is trying to sell too - there is a willing buyer, and a willing seller, but never the twain shall meet.
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bg
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Post by bg on Jun 26, 2018 14:17:53 GMT
404 is also available at a discount but I've had an order in to buy this for a day now but it still won't trade. It's so frustrating and I know it puts a lot of people off the platform. As a test I asked the system to buy a small amount on 404 just after reading your post, and this 'buy; happened at 15:07 today. Are you sure you've not forgotten to tell the system to ignore monitoring events and credit events? Nevertheless I do agree - sometimes the system just doesn't buy, I've had a buy order for the last 4 or 5 days, the SM hasn't moved AT ALL, the availability is the same as when I placed my order. That must be immensely frustrating for whoever is trying to sell too - there is a willing buyer, and a willing seller, but never the twain shall meet. I also bought at 15.07.....so that must have been when the matching cycle happened. 24 hours after I put the order in. Surely they can run it a bit more often that that!
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Post by Butch Cassidy on Jun 26, 2018 14:18:32 GMT
Its all part of our mix of funding. As will be further additions to our loan funding lines in due course. Its about our continuing growth and diversification of our funding lines. Could you also perhaps explain the following;
23rd April : Pipeline showed 3/64 loans with rates over 8%
To which you replied “I think you will find there are very few loans in the 5-7% rate going forwards - almost everyone in our current pipeline starts at 8% MLA.”
Since then I have received 20 "Upcoming loan" notification e-mail's; #692 - 7%, #709 - 8%, #719 - 7%, #720 - 7%, #722 - 6%, #723 - 6%, #725 - 6%, #726 – 8%, #728 – 6%, #736 – 6%, #741 – 6%, #742 – 10%, #745 – 8%, #747 – 6%, #748 – 6%, #743 – 6%, #750 – 6%, #752 – 8%, #754 – 6.5%, #755 – 6%
26th June : Currently Pipeline shows 8/81 loans with rates over 8%
Would it not be a more honest analysis to suggest that most low rate loans of <8% are being funded for liquidity & not risk but need to be discounted to encourage enough investor demand to shift them?
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dandy
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Post by dandy on Jun 26, 2018 14:22:57 GMT
I also bought at 15.07.....so that must have been when the matching cycle happened. 24 hours after I put the order in. Surely they can run it a bit more often that that!If you consider that each "cycle" is run to 40 decimals and probably uses enough computational power to mine a bitcoin then that may explain it ...
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bg
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Post by bg on Jun 26, 2018 14:31:45 GMT
I also bought at 15.07.....so that must have been when the matching cycle happened. 24 hours after I put the order in. Surely they can run it a bit more often that that!If you consider that each "cycle" is run to 40 decimals and probably uses enough computational power to mine a bitcoin then that may explain it ... Very true! But I would think they could run an instant matching cycling for discounts. Everything listed at a discount is listed my a manual account. If someone puts in an order to buy in the MLA at a discount then why not just match then and there. Only downside is that the pooled accounts may miss out on a bit of that discount (ie the provision fund will) but we are talking tiny numbers. On the plus side the liquidity of the platform will improve significantly as anyone who needs cash knows selling at a discount will lead to a very quick (probably instant) sale. That has benefits for everyone.
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dandy
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Post by dandy on Jun 26, 2018 14:48:06 GMT
If you consider that each "cycle" is run to 40 decimals and probably uses enough computational power to mine a bitcoin then that may explain it ... Very true! But I would think they could run an instant matching cycling for discounts. Everything listed at a discount is listed my a manual account. If someone puts in an order to buy in the MLA at a discount then why not just match then and there. Only downside is that the pooled accounts may miss out on a bit of that discount (ie the provision fund will) but we are talking tiny numbers. On the plus side the liquidity of the platform will improve significantly as anyone who needs cash knows selling at a discount will lead to a very quick (probably instant) sale. That has benefits for everyone. I think AC work on an aggregated model splitting everything among everyone as opposed to first come first served. i.e. if you sell £100 and 100 people want it then everyone would get £1. So entire system scan for every sale ... "treating customers fairly" and all that even if "annoying the hell out of them" in the process  I am a software novice so very possibly wrong in my basic understanding and explanation
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puddleduck
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Post by puddleduck on Jun 26, 2018 15:05:15 GMT
Very true! But I would think they could run an instant matching cycling for discounts. Everything listed at a discount is listed my a manual account. If someone puts in an order to buy in the MLA at a discount then why not just match then and there. Only downside is that the pooled accounts may miss out on a bit of that discount (ie the provision fund will) but we are talking tiny numbers. On the plus side the liquidity of the platform will improve significantly as anyone who needs cash knows selling at a discount will lead to a very quick (probably instant) sale. That has benefits for everyone. I think AC work on an aggregated model splitting everything among everyone as opposed to first come first served. i.e. if you sell £100 and 100 people want it then everyone would get £1. So entire system scan for every sale ... "treating customers fairly" and all that even if "annoying the hell out of them" in the process I am a software novice so very possibly wrong in my basic understanding and explanation You could be correct, but if not handed correctly this leads to a defective design whereby the system is constantly recaluting when your 100 people becomes 101 for example - an endless cycle attempting to rebalance, and failing to commit the transaction if someone else comes in for a bite. I've no idea if it does, but ultimately while you may want to be 'fair' you have to at some point do the trade, you can't constantly be trying to chase a moving target.
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Post by chris on Jun 26, 2018 16:27:53 GMT
I think AC work on an aggregated model splitting everything among everyone as opposed to first come first served. i.e. if you sell £100 and 100 people want it then everyone would get £1. So entire system scan for every sale ... "treating customers fairly" and all that even if "annoying the hell out of them" in the process I am a software novice so very possibly wrong in my basic understanding and explanation You could be correct, but if not handed correctly this leads to a defective design whereby the system is constantly recaluting when your 100 people becomes 101 for example - an endless cycle attempting to rebalance, and failing to commit the transaction if someone else comes in for a bite. I've no idea if it does, but ultimately while you may want to be 'fair' you have to at some point do the trade, you can't constantly be trying to chase a moving target. The system cycles through each loan in turn, calculating everyone who wants to buy and everyone who wants to sell. They're then matched and added to a list of sales to be processed by a separate program. That separate program batches sales up and processes them in turn, as fast as it can. At the moment the current process takes far too long per loan - some loans take a few seconds but others can take a few minutes due to various inefficiencies in the calculations that have come to the fore as the platform has scaled. There's a replacement solution already in testing that takes about 1 second per loan to process through a large increase in efficiency. We've had some other higher priority work come through that has delayed this release by a couple of weeks but we're getting close now. When released each loan would then be processed every 10 - 15 minutes or so, instead of it taking 15 hours. That service is also designed to scale through parallelism when needed, so we can run 2, 3, 4+ copies of the program to have it speed things up that many times.
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bring it on.
