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Post by mrclondon on Feb 2, 2019 17:36:35 GMT
It's not particularly easy to find the balance and coverage ratios of the provision funds. The FAQ stateswhich is apparently refering to the page reached by clicking on the 'Read More' button under the heading 'How the account works.' on each account's advertising page. Summarising the data (last updated 30th September 2018) | Account | Url | Balance | Expected
Loss | Coverage
Ratio | | Property Secured Account (PSA) | Link | £240,000 | 0.30% | 3.76x | | Great British Business Account (GBBA) Series 2 | Link | £334,000 | 0.25% | 3.27x | | Quick Access Account (QAA) | Link | £1,100,000 | 0.66% | 3.22x | | 30-Day Access Account (30DAA) | Link | £2,000,000 | 0.66% | 3.22x |
What is not clear is the state of the provision fund for the accounts now closed to new investments i.e. GBBA Series 1 and GEIA.
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DeafEater
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Post by DeafEater on Feb 2, 2019 18:41:04 GMT
Ah now I can help you out there.
The GEIA allocation algorithm managed to put nearly two thirds of my funds in the various I** loans and my calculations suggest that when the provision fund eventually pays out, it might run to the price of a cup of coffee. At the time I invested in it, AC didn't publish the VALUE of the fund but said the expected losses were 0.06% and that the coverage was 300% of the expected losses. In September 2018 there was about 130k in the GEIA provision fund. If you look at the sum of the I** loans (at least one of which looks like a 100% loss due to incompetent management of the loan by AC), the nightmare is comparable to Colateral but without the light relief provided by BDO's fees.
Apart from the funds I have stuck in the GEIA I no longer invest in AC.
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Post by davee39 on Feb 2, 2019 20:48:10 GMT
'When the provision fund eventually pays out'. Clearly an optimist!
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Post by brightspark on Feb 3, 2019 9:50:52 GMT
Ah now I can help you out there.
The GEIA allocation algorithm managed to put nearly two thirds of my funds in the various I** loans and my calculations suggest that when the provision fund eventually pays out, it might run to the price of a cup of coffee. At the time I invested in it, AC didn't publish the VALUE of the fund but said the expected losses were 0.06% and that the coverage was 300% of the expected losses. In September 2018 there was about 130k in the GEIA provision fund. If you look at the sum of the I** loans (at least one of which looks like a 100% loss due to incompetent management of the loan by AC), the nightmare is comparable to Colateral but without the light relief provided by BDO's fees.
Apart from the funds I have stuck in the GEIA I no longer invest in AC.
Clearly the provision fund cannot payout as there is insufficient in the kitty. Do you have a practical suggestion for bridging the gap?
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registerme
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Post by registerme on Feb 3, 2019 10:18:50 GMT
Clearly the provision fund cannot payout as there is insufficient in the kitty. Do you have a practical suggestion for bridging the gap? Where AC is clearly at fault, as with the supposed diversification algorithm, I'd suggest AC's balance sheet. It's either that or deal with thousands of formal complaints and possible legal action.
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cb25
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Post by cb25 on Feb 3, 2019 14:44:43 GMT
Clearly the provision fund cannot payout as there is insufficient in the kitty. Do you have a practical suggestion for bridging the gap? Where AC is clearly at fault, as with the supposed diversification algorithm, I'd suggest AC's balance sheet. It's either that or deal with thousands of formal complaints and possible legal action. Could be costly given the (original) GBBA PF is £961K and AC have suggested losses on loan 227 could be in 7 figures if it gets called in, and that's just one of many dodgy loans.
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registerme
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Post by registerme on Feb 3, 2019 14:50:42 GMT
Where AC is clearly at fault, as with the supposed diversification algorithm, I'd suggest AC's balance sheet. It's either that or deal with thousands of formal complaints and possible legal action. Could be costly given the (original) GBBA PF is £961K and AC have suggested losses on loan 227 could be in 7 figures if it gets called in, and that's just one of many dodgy loans. No argument there. To be honest I think the largest single risk I am currently running in P2P is AC's provision fund, how / when / where / why / what it pays out for, and whether AC makes good for what it is responsible for.
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Post by geoffrey on Feb 3, 2019 15:15:39 GMT
Hmmm. It looks like Assetz has a problem with these. They've allowed people whose capital was, by the "luck of the draw", not invested in the problem loans to withdraw their funds, leaving others locked into the non-performing loans. The model was flawed, since there was no way an investor could avoid a specific loan. It was all allocated by the algo. This leads to unfair treatment of some investors based on random factors, and no way to pool the losses properly across investors, since those who could withdraw funds no doubt have done so.
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registerme
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Post by registerme on Feb 3, 2019 15:28:14 GMT
That, plus the fact that the original algo in no way, by any remotely sensible understanding of the word, "diversified".
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cb25
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Post by cb25 on Feb 3, 2019 15:34:05 GMT
That, plus the fact that the original algo in no way, by any remotely sensible understanding of the word, "diversified". Indeed. Before I knew better, I had a high-water mark of £27,600 in GBBA in June 2017, of which £5,500 is now stuck in loan 227.
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sl75
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Post by sl75 on Feb 4, 2019 11:13:24 GMT
What is not clear is the state of the provision fund for the accounts now closed to new investments i.e. GBBA Series 1 and GEIA. Balance of provision fund for the Green Energy Account is stated within its section on the dashboard when expanding the "SHOW MORE>" link. Maybe the same for GBBA series 1 (I don't know, as I never invested in it).
I assume that as this is only visible to logged-in users who are invested in that account, I cannot quote it here, however, it seems a suspiciously round amount (a precise multiple of £1000 at the time I looked)
Given that there've been plenty of loans making interest payments, and that the difference between the underlying interest rate and the 7% paid to investors should have been diverted to the Provision Fund, I'd expect the Provision Fund to have a balance out to 40 decimal places!
Comparing this with a reasonable range of estimates for the total investment in the GEA (my GEA has pieces of 20 loans, whose total balance is just over £14M, but I am certain substantial amounts of those loans are held outside the GEA), it doesn't look a million miles away from the coverage ratios of the other accounts, assuming a similar "expected loss" to the QAA/30DAA.
In practice, the GEA has a more mature loan book, with many of the "good" loans having been repaid, so we may well expect a higher loss from "today's" loan book... up to AC to decide whether to release more precise figures I suppose.
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Post by geoffrey on Feb 8, 2019 10:46:43 GMT
Thanks for pointing this out sl75. If Assetz has nothing to hide, they won't be afraid of us quoting the figures here. Actually someone already quoted the GBBA amount above, though not obviously. In any case, this is an Independent Forum. My accounts show: Green Energy Account Series 1: remaining Provision Fund amount £156,000.00. Great British Business Account Series 1: remaining Provision Fund amount £974,000.00. Without knowing how much remains invested in these accounts, it's impossible to know what this means, but the sums look entirely inadequate. The sums indeed do not appear to be calculated in real time. Some transparency on the state of these funds from Assetz is sorely needed IMHO. |
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mary
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Post by mary on Feb 8, 2019 12:00:31 GMT
Summarising the data (last updated 30th September 2018) | Account | Url | Balance | Expected
Loss | Coverage
Ratio | | Property Secured Account (PSA) | Link | £240,000 | 0.30% | 3.76x | | Great British Business Account (GBBA) Series 2 | Link | £334,000 | 0.25% | 3.27x | | Quick Access Account (QAA) | Link | £1,100,000 | 0.66% | 3.22x | | 30-Day Access Account (30DAA) | Link | £2,000,000 | 0.66% | 3.22x |
So the various Accounts can sustain losses of between 1 and 2% before Capital losses. As FC increased their expected losses from 2% to 3.3% in December, and some other platforms have loans in default between 10 and 50% of the outstanding loan book, AC’s expected losses look outstandingly optimistic.
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SteveT
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Post by SteveT on Feb 8, 2019 12:05:00 GMT
Straight comparison between AC (secured) and FC (essentially unsecured beyond PGs) doesn’t mean a lot.
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IFISAcava
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Post by IFISAcava on Feb 8, 2019 12:31:40 GMT
Summarising the data (last updated 30th September 2018) | Account | Url | Balance | Expected
Loss | Coverage
Ratio | | Property Secured Account (PSA) | Link | £240,000 | 0.30% | 3.76x | | Great British Business Account (GBBA) Series 2 | Link | £334,000 | 0.25% | 3.27x | | Quick Access Account (QAA) | Link | £1,100,000 | 0.66% | 3.22x | | 30-Day Access Account (30DAA) | Link | £2,000,000 | 0.66% | 3.22x |
. As FC increased their expected losses from 2% to 3.3% in December, and some other platforms have loans in default between 10 and 50% of the outstanding loan book, AC’s expected losses look outstandingly optimistic. And to reinforce the point, unfortunately, the GEA will sustain losses massively in excess of 1-2%.
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