jonno
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nil satis nisi optimum
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Post by jonno on Nov 19, 2014 11:03:48 GMT
Couldn't agree more with these sentiments.Maybe that's why the GEIA has been launched- for the likes of us plebs.
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bugs4me
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Post by bugs4me on Nov 19, 2014 11:06:53 GMT
TFTO sl75 Maybe uncertainty on speed of shadowbid collections prevents this being practical. I always paid as soon as soon as I saw email. If others were slow in paying then AC could just have removed their shadow facility. TBH, it is a load of c**p and just allows several wealthy individuals to take the cream. Well that's certainly how things could be interpreted. I've had my eye on more than a couple of investments and adjusted my MLIA accordingly. Will these units ever be available - who knows, certainly not myself. Are these investments currently held by retail investors or underwriters - again who knows. So this morning I withdrew the excess funds for greener pastures and will continue to do so. I never signed up to see idle funds hanging around although that was acceptable if I knew things were going (to eventually) happen. Maybe everything will eventually go the same way as the GEIA and us pesky retail investors, asking questions doing our bit of DD will become a thing of the past. Certainly wouldn't surprise me.
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oldgrumpy
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Post by oldgrumpy on Nov 19, 2014 11:06:59 GMT
"Retail investors with a target could perhaps be given a heads up that the loan will be drawing down soon to allow them to provide funds to meet the demand..."
I very much hope AC are going to do this anyway as a policy*, so that we can move funds in shortly before drawdown to by units immediately without a protracted dead money period. Three days should do it.
edit: * and inform us that units WILL be available, or not.
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TFTO
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Post by TFTO on Nov 19, 2014 11:08:04 GMT
TFTO sl75 Maybe uncertainty on speed of shadowbid collections prevents this being practical. There's no such concern with what I proposed. In that scenario, loan units are created for retail investors WITH FUNDS AVAILABLE. The rest is covered by underwriters (who will have to be prepared collectively to underwrite the entire amount anyway). Retail investors with a target could perhaps be given a heads up that the loan will be drawing down soon to allow them to provide funds to meet the demand (whether as new funds or by adjusting other targets to release funds from existing loans), giving the equivalent functionality to shadow bidding (for those who were "well-behaved"), but without the auction effectively being held to ransom by a relatively insignificant retail shadow bidder who is slow in getting their funds available. This could work quite nicely, perhaps you you can get AC to condsier it. However, I suspect the underwriters will not like it, as their power (and profit) will be diminished. It makes me wonder just how much the underwriters were behind the changes which led to the new site?
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TFTO
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Post by TFTO on Nov 19, 2014 11:10:53 GMT
"Retail investors with a target could perhaps be given a heads up that the loan will be drawing down soon to allow them to provide funds to meet the demand..."
I very much hope AC are going to do this anyway as a policy*, so that we can move funds in shortly before drawdown to by units immediately without a protracted dead money period. Three days should do it.
edit: * and inform us that units WILL be available, or not.
Of course, we would then need to cancel all other AI, otherwise the funds might be pinched elsewhere.
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oldgrumpy
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Post by oldgrumpy on Nov 19, 2014 11:14:08 GMT
As far as I know, only one underwriter has "come out" on the forums to give an underwriter perspective on matters. Could do with a few more, though it is understandable why they would want to stay (I nearly said lurk!) in the shadows (to coin a topical phrase)!
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sl75
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Post by sl75 on Nov 19, 2014 11:28:03 GMT
Of course, we would then need to cancel all other AI, otherwise the funds might be pinched elsewhere. If you've set your targets correctly, funds would only be "pinched" for the purpose of making investments you've already told the system you want it to make for you... if you didn't to make those investments you shouldn't have set those targets! Worst case, you're put back to exactly the same position as we have now - relying on existing holders to make their units available on the aftermarket in order to fulfil your target later.
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TFTO
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Post by TFTO on Nov 19, 2014 11:31:26 GMT
Of course, we would then need to cancel all other AI, otherwise the funds might be pinched elsewhere. If you've set your targets correctly, funds would only be "pinched" for the purpose of making investments you've already told the system you want it to make for you... if you didn't to make those investments you shouldn't have set those targets! Worst case, you're put back to exactly the same position as we have now - relying on existing holders to make their units available on the aftermarket in order to fulfil your target later. Yes, I know that but if I specifically wants funds to purchase a loan not yet drawndown I would need another account (Manual Loan Drawdown Account) in which to place these funds to avoid the MLIA. The alternative is to turn off all MLIA targets temporarily.
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sl75
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Post by sl75 on Nov 19, 2014 11:45:49 GMT
Yes, I know that but if I specifically wants funds to purchase a loan not yet drawndown I would need another account (Manual Loan Drawdown Account) in which to place these funds to avoid the MLIA. The alternative is to turn off all MLIA targets temporarily. This seems to be overcomplicating it - at least for the MLIA. If you want the system to invest money as and when it becomes available, set a target, if you don't, don't set a target! We'll later have bespoke investment accounts - these are where you can set up your own precise esoteric requirements. Although not explicitly stated, I would assume that when these are launched, multiple bespoke investment accounts will be possible. For those who seek very precise control of amounts invested in different sub-categories (perhaps even down to manually choosing the exact timing of when to attempt investment in an individual loan), this would be the mechanism to use. Perhaps it may even become possible to set up a bespoke account with your "manual loan drawdown account" functionality...
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hendragon
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Post by hendragon on Nov 19, 2014 11:52:08 GMT
There's no such concern with what I proposed. In that scenario, loan units are created for retail investors WITH FUNDS AVAILABLE. The rest is covered by underwriters (who will have to be prepared collectively to underwrite the entire amount anyway). Retail investors with a target could perhaps be given a heads up that the loan will be drawing down soon to allow them to provide funds to meet the demand (whether as new funds or by adjusting other targets to release funds from existing loans), giving the equivalent functionality to shadow bidding (for those who were "well-behaved"), but without the auction effectively being held to ransom by a relatively insignificant retail shadow bidder who is slow in getting their funds available. This could work quite nicely, perhaps you you can get AC to condsier it. However, I suspect the underwriters will not like it, as their power (and profit) will be diminished. It makes me wonder just how much the underwriters were behind the changes which led to the new site? If AC are to grow I suspect that there are not enough retail investors to enable them to do so. If you bring in the hnwis as underwriters they are always going to get first pick. Under the old site bids from retail investors would remove underwriting, this has now changed. It makes commercial sense for AC to do this and to end the retail investors in their current form. The model that AC are using now will have to change to a RS/Wellesley style. A bespoke investment account would probably replace investing in individual loans. Much easier and simpler for AC to deal with in terms of communcation with retail investors. I suspect that this will be a gradual trend, and not happen overnight. From my own point of view it probably means I will still invest with AC but at much lower levels, probably 50-75% less.
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TFTO
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Post by TFTO on Nov 19, 2014 12:00:00 GMT
This could work quite nicely, perhaps you you can get AC to condsier it. However, I suspect the underwriters will not like it, as their power (and profit) will be diminished. It makes me wonder just how much the underwriters were behind the changes which led to the new site? If AC are to grow I suspect that there are not enough retail investors to enable them to do so. If you bring in the hnwis as underwriters they are always going to get first pick. Under the old site bids from retail investors would remove underwriting, this has now changed. It makes commercial sense for AC to do this and to end the retail investors in their current form. The model that AC are using now will have to change to a RS/Wellesley style. A bespoke investment account would probably replace investing in individual loans. Much easier and simpler for AC to deal with in terms of communcation with retail investors. I suspect that this will be a gradual trend, and not happen overnight. From my own point of view it probably means I will still invest with AC but at much lower levels, probably 50-75% less. You may well be correct and I would then look to reduce my investment as well.
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niceguy37
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Post by niceguy37 on Nov 19, 2014 12:03:04 GMT
If AC are to grow I suspect that there are not enough retail investors to enable them to do so. If you bring in the hnwis as underwriters they are always going to get first pick. Under the old site bids from retail investors would remove underwriting, this has now changed. It makes commercial sense for AC to do this and to end the retail investors in their current form. The model that AC are using now will have to change to a RS/Wellesley style. A bespoke investment account would probably replace investing in individual loans. Much easier and simpler for AC to deal with in terms of communcation with retail investors. I suspect that this will be a gradual trend, and not happen overnight. From my own point of view it probably means I will still invest with AC but at much lower levels, probably 50-75% less. You may well be correct and I would then look to reduce my investment as well. If this is a persistent problem then perhaps AC could require underwriters to list, say 50%, of their holdings of a particular loan for sale within 90 days of drawdown. AC are better than most at listening, and are not shy of making changes to adapt to the times (or trying to lead the way), so I'm hopeful a way forward can be found. I have some ideas but was waiting until some of the current issues are tidied up.
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sl75
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Post by sl75 on Nov 19, 2014 12:14:19 GMT
If you bring in the hnwis as underwriters they are always going to get first pick. Only if you define it that way... Ordinarily, by my understanding, "underwriting" is the function of picking up what the primary target audience for a particular issue DIDN'T take, and often is done in the expectation that it's unlikely to be called upon in full (or in some cases at all), but is legally necessary to allow further agreements to proceed on the certainty that funds will be available at the point they are needed. Indeed, I'm sure there'd be plenty of HNWIs who would gladly pocket the underwriting fee without having to actually stump up the cash each and every time - allowing them to use funds that they *can* liquidate within 24 hours but don't *want* to as part of their resources backing their underwriting commitment, and to instantly switch to underwriting the next proposition without having to rely on being able to liquidate the most recent tranche of loans made... Case in point (back to the original subject of this thread), the underwriter who took the lions share of this £3.4m WInd Turbine Portfolio loan could be reasonably sure of being able to liquidate at least a few £k at a time of their investment in this loan on short notice, but each time they do so, they can be less reliant on being able to do so again in the future.
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is
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Post by is on Nov 19, 2014 12:29:15 GMT
You may well be correct and I would then look to reduce my investment as well. If this is a persistent problem then perhaps AC could require underwriters to list, say 50%, of their holdings of a particular loan for sale within 90 days of drawdown. AC are better than most at listening, and are not shy of making changes to adapt to the times (or trying to lead the way), so I'm hopeful a way forward can be found. I have some ideas but was waiting until some of the current issues are tidied up. Well functioning market and liquidity are of interest to all, even more so to underwriters, with larger sums committed. Institutional buy and hold investors are the ones likely to invest and retain large tranches of loans. Underwriter returns rely on re-sale, and most of the holding will usually be sold off.
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sl75
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Post by sl75 on Nov 19, 2014 12:37:36 GMT
They are only "underwriters" in name. Underwriters should be providing short term support to the market to ensure the deal gets printed. The problem for AC is that the "retail" investor base is just too shallow to take out the underwriters in any reasonable time period. It's easy to demonstrate that the underwriters have at least £10mm in capital (possibly much more) which makes them a significant players, rather than a marginal short-term support. The AC underwriters have always really been large investors who get better economics than retail. The "retail" investor base will surely not ALWAYS be too shallow to take out the underwriters in any reasonable time period... In essence, as I see it, there need to be two types of participation: 1. [available to everyone, underwriters included!] set a (long-term) "target", backed by liquid funds actually available at drawdown. 2. [only available to underwriters] commit to provide liquid funds at drawdown up to a specified level, regardless of what the long-term "target" is. This commitment is paid for. Certainly, if an underwriter wishes to set a "target" and commit funds for longer-term, they are welcome to do so, but it seems to me that target should not be given any preference over any other targets already set and funded before drawdown. As long as there exist underwriters who do not wish to hold the investment long-term, the difference will seem immaterial, however, it seems to me important not to bake in functionality that will turn "underwriters" into long-term investors who simply dump any loans they don't want to hold on the unwashed masses but cherry-pick the ones they like best to keep for themselves. The old site allowed this - I and many others had bid on this £3.4m WInd Turbine Portfolio Loan, and got loan parts. I'm pretty sure I bid more than I kept long-term. Those who chose not to bid did so in the knowledge that they were entirely reliant on existing holders choosing to make their loan units available after drawdown - something that many underwriters choose to do, but AIUI are not obliged to. Overall, this suggestion is merely intended to restore the previous functionality of allowing retail investors to participate in the loan before/at drawdown (with underwriters underwriting). Anything the underwriter gets at drawdown (including if they've set an explicit target in order to "compete" with the retail investors) is theirs to do with as they wish.
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