Lendy to offer new wealth products at Cowes Week....

If Lendy adds to the offer a BuyBack (like Mintos) from the company. It could become an interesting offer...

I would disagree with that. The raw material of P2P is not new. Consumer loans, SME loans, development loans, bridges, invoice financing etc. Institutions, from banks to funds, have been investing in these products for decades (longer for many). These are just fixed income loans. The return to risk proposition in most of these loan classes is historically fairly good. In risk terms most of these products are higher risk than investment grade bonds and more comparable to speculative grade bonds or emerging market sovereign debt. At the high-yield end, some type of lending have risk characteristics more equivalent to private equity but with potential returns to match.

The rise of P2P in the last decade is mainly the result of the confluence of three factors: technology (already available), borrower demand (caused by institutional lenders tightening up lending standards and withdrawing from certain forms of lending due to prudential requirements) and retail investor demand (an ageing population, used to abnormally high real deposit rates, seeking out yield).

The reason why the return has not been proportionate to risk in some forms of P2P, such as speculative development loans, is due to the platform. First, around 50% of the yield being taken by the platform, halving the return but not reducing the risk at all. Second, these loans are structured with poor risk-reward for lenders. Basing developments loans on LGDV results in the developer having only a small constrained downside. They can walk away from the SPV with little equity loss. Their upside, however, even after paying 20-30% in interest and fees, is hugely levered. Effectively, lenders sell incredibly cheap options to speculators and no speculator ever says no to a cheap option. The few institutional lenders that deal in speculative development loans often base loans on LTC (loan to cost), rather than GDV. This forces borrowers to put far more equity down, resulting in less upside/more downside. Developers are then less inclined to attempt very marginal developments which often fail. The default rates are thus lower. These types of loans, however, don't work well for platforms like SS. The rates charged to borrowers have to be lower to represent the higher equity down and lower default risk. This cuts the platform's margin substantially. 

I think that these new products are a good thing as it will most likely help me unload the much reduced remainder of my holdings. Its been an interesting experience and I am not totally unhappy with the outcome nor am I totally surprised. Nothing ventured nothing gained.... I feel that Ly is now getting the judgement of the market place and it going to be hard to talk their way out of that one.

I think not “manual” as such, but more like private equity that you have a commitment period, however it is debt/loan, so no upside of equity.

As has been said only £50k to join the party for 6% 30 days notice and no provision fund. Can have any amount in Growth St to example one platform at 5.3% little cash drag, black box, default fund and none so far that have come to light as all kept in house. Think about it

Could very well be the same set the loans! Half defaulted and half non-performing. Your capital still at risk, I really don’t get it that why my capital still at risk, same kind of risk (loan and platform), while losing the choice of loans, and the return is lower and capped? If I am asset rich and time poor, then it would be such easy decision to make based on my observation.