JamesFrance
Member of DD Central
Port Grimaud 1974
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Post by JamesFrance on Oct 15, 2014 10:18:56 GMT
This is what worries me. There is at least one platform already handling large amounts of investors cash which seems to have virtually no assets itself. Whether they can make sufficient profit to deal with the increasing regulation is a worry.
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bugs4me
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Post by bugs4me on Oct 15, 2014 10:31:38 GMT
This is what worries me. There is at least one platform already handling large amounts of investors cash which seems to have virtually no assets itself. Whether they can make sufficient profit to deal with the increasing regulation is a worry. It's not a lack of assets that would be of a concern to myself although it may raise an eyebrow here and there. The most important thing is that in the event that the P2P platform decided it simply wasn't worth it - and I suspect there are more than a couple that fall into this category ATM even though on the surface they continue to operate to a fashion, what exactly is the exit route for current lenders/investors.
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Post by jackpease on Oct 15, 2014 12:48:43 GMT
>>>>W offers least effort and least concerns I agree Ratesetter and Wellesley are easy to manage and give few concerns BUT we are insulated from failures or signs of impending failures - whereas FC, FK etc send depressing emails with failures/impending failures etc Failures we know about are a worry and causing some to bail out - but failures we we don't know and probably won't know about eg within RS and Wellesley mean we wont' get any early warning of poor risk management at the sharp end I worry that the lesson from this is that lenders will create systems that avoid washing their dirty linen in public... J
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Oct 15, 2014 14:14:16 GMT
I fully agree with the sentiments expressed on here regarding PBL's. My initial worries were over LTV's and how the valuations had been arrived at. Now I wont look at any PBL unless the LTV is below 70% and the valuation has been done by a RICS accredited outfit. This does not give you protection against extreme fluctuations in property prices or fire sales but it does take you some way down that particular pike. Like many other things, PBL's if they look too good to be true they usually turn out to be just that.
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Steerpike
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Post by Steerpike on Oct 15, 2014 14:32:44 GMT
Clearly, there is a growing demand for organisations that provide a comparatively low risk solution with higher interest rates than are currently available in conventional savings accounts.
I didn't venture in to P2P/P2B because I enjoy high risk or feel an overwhelming need to help embryonic businesses, but simply to get an interest rate that has a chance of at least keeping up with inflation after tax.
This need implies businesses with models that feature lowers costs than banks but with growingly similar risk levels provided by provision fund, safeguard, security, insurance, quality of governance etc.
If there is a reasonable expectation of funds being secure it is of much less interest if there are hiccups in the loan book.
I find myself increasingly attracted to lower risk higher security opportunities.
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bugs4me
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Post by bugs4me on Oct 15, 2014 14:40:18 GMT
I'm with your sentiments on this one davee39. It is up to the new P2P platform to attract new lenders/investors based upon sound commercial practice rather than relying upon sentiment. There is a P2P platform floating around that requests investment so that they can go and invest themselves in other P2P platforms. It appears that apart from the cost of the website there is zero risk to themselves. Simply looking at some of the dormant P2P platforms then IMO history will continue to repeat itself especially once FCA compliance costs start to bite. Hopefully lenders/investors do not get burnt. I am not advocating loyalty to any platform. All platforms at one stage were new. Some have grown and others disappeared and this process will continue. However if after doing your own due diligence on a loan and platform, you are still inclined to invest then do so. Many platforms, including the larger ones, post loans with very good ratings that on closer inspection turn out to be less than ideal. The risks to our investments are not mitigated by the size of the platform. All P2P platforms are businesses and like us are driven by the desire to make money. If you are concerned with platforms offering low returns to investors whilst charging high rates to borrowers then don't invest in them. The beauty of the system is that investors put their cash where they want. Investing in P2P is high risk and we need a good number of platforms available to invest on in order to lower that risk. If the number of platforms available reduces significantly, the commercial drive for high invest rates will reduce. As investors, looking for good returns, we need an active market that is competing for our money. Tougher Regulations generally mean a cost to someone and that is generally the investor. There are some very small platforms out there and I've invested on one knowing that it carries a risk. It is up to the individual to decide how and when to invest. Of course all P2P/P2B platforms were new at one stage and started smallish. My concern is where their growth is stagnant to say the least. Looking at more than a couple of P2P's ATM they seem to be stuck in a rut - not going anywhere. Is this a lack of any kind of meaningful investment on their part, a failure to engage with the P2P community, etc, etc. At some stage they either need to take off or simply gradually wither away. Why would I wish to invest in a platform that offered a similar (on paper) investment return to an established P2P provider that had backup resources. All P2P is a risk. But if/when the wheels come off a particular investment what resources does the platform have to minimise any losses that I may incur. So whilst size is not everything it does carry some weight. As you correctly state though - it is an individual decision.
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webwiz
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Post by webwiz on Oct 15, 2014 16:30:06 GMT
As to the question posed by the OP. Look at this list, noting some companies do not get a mention www.p2pmoney.co.uk/statistics/size.htmThe tiny companies will be losing money. Will they still be around in 5 years time? This does not seem to be very up to date. Wellesley, shown as £47m is now over £100m
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gb007
Member of DD Central
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Post by gb007 on Oct 15, 2014 17:03:54 GMT
This does not seem to be very up to date.... Here is Altfi's list which seems to be more up to date: www.altfi.com/data
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Steerpike
Member of DD Central
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Post by Steerpike on Oct 15, 2014 17:21:03 GMT
Great site gb thank you for the link
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Oct 16, 2014 15:18:01 GMT
The original subject was Risk or Reward but I would like to add Entertainment. For me P2P is great entertainment and I have had a great time investing in about 300 businesses on five different platforms in the last two years. Plus there is the banter that goes on, on this Forum. P2P is after all a gamble and gambling is an entertainment and certainly creates more fun than stuffing your money in the Nationwide or some other safe repository and then watching it slowly losing money. A word of caution at this point and that is, like all gambling P2P can become addictive and eat up lots of your time. If you cannot afford to lose or don't have the time, don't do it.
To keep my accountant and HMRC happy I recently had to have a detailed look at my investments and was surprised to find that I only had about 1.5% of my net worth in P2P (smallest amount £20 largest £2000). This was further reinforced this week when I got quite excited about one of my FC investments going belly up for about £38 when at the same time the money I had invested in World Stock Markets had gone down in value by more than three times my total investment in P2P. There must be a message here about a warped reality or something similar!
However coming back to Risk, Reward and Entertainment. For me Entertainment is the winner with Reward coming a strong second simply because I get a big kick out of winning and finally risk because that adds the element of excitement.
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shimself
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Post by shimself on Oct 17, 2014 11:38:11 GMT
I agree entirely, just because someone starts a business, of any description, it doesn’t mean that we are obliged to support them.
As we here are one of the Ps in the name I do feel we ought to give new platforms a once over, and if we think they have something to offer then we should give feedback to them, and a mention or review here at least.
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webwiz
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Post by webwiz on Oct 17, 2014 18:37:02 GMT
I would be very interested in other peoples' ideas on risk reduction through diversification. Would anyone willing please give their ideas on the measure below, either what you would recommend or your actual figures. On looking at my own investments I find that my actual figures are as given in brackets, but on reflection I am not sure that I would recommend these.
Maximum percentage of all investment assets in p2p/p2b (24%)
Maximum percentage of p2p/p2b in one platform (42%)
Maximum percentage of p2p/p2b in one loan (14%)
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mikes1531
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Post by mikes1531 on Oct 17, 2014 21:34:17 GMT
Where I come unstuck is platform risk. Here I have 75% of my P2P/P2B assets across 3 platforms (30/25/20%) and then another 25% across 5 platforms. I'm invested in four platforms (53/28/17/2%). I'd like to invest more than the 2% I have in FS, but their investment opportunities are in rather short supply. I'd be happy diversifying over more than four platforms, but I'm not a set-it-and-forget-it person so managing my positions already takes a bit more of my time than I'd like. The thought of having more platforms to have to monitor puts me off further diversification. Am I being too concerned about that? samford71: Do you not find investments in eight platforms a bit too much to keep track of? How do you manage them? How do other investors deal with this issue?
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bugs4me
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Post by bugs4me on Oct 17, 2014 21:52:43 GMT
Where I come unstuck is platform risk. Here I have 75% of my P2P/P2B assets across 3 platforms (30/25/20%) and then another 25% across 5 platforms. I'm invested in four platforms (53/28/17/2%). I'd like to invest more than the 2% I have in FS, but their investment opportunities are in rather short supply. I'd be happy diversifying over more than four platforms, but I'm not a set-it-and-forget-it person so managing my positions already takes a bit more of my time than I'd like. The thought of having more platforms to have to monitor puts me off further diversification. Am I being too concerned about that? samford71: Do you not find investments in eight platforms a bit too much to keep track of? How do you manage them? How do other investors deal with this issue? Depends how active you want to be or need to be. I'm invested with six. Of those, one is in runoff mode, I simply withdraw the money as it is repaid. Another two are really invest and forget - they are fixed term. Little involvement on my part. So actively I'm in three. Funnily enough (not really) the one that seems to take the most time for least reward simply waiting for the wheels to grind is the one you mentioned above. I'll give that until then end of the year as I simply cannot hang around pushing F5 waiting for things to happen. If nothing then I'll wind it down or just keep to the odd ultra high value they offer once in a blue moon. I don't feel though it's just about the number of platforms. It's also the involvement in each one. With A* for example, I'm only in 11 loans ATM with another waiting for drawdown. Okay they are fairly reasonable amounts overall but I think I'd have difficulty in monitoring more than that.
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Steerpike
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Post by Steerpike on Oct 18, 2014 9:53:51 GMT
I am invested in 11 p2p/p2b platforms, however 85% is in 6 platforms. Of the 11 there are 7 that require very little time as the loans are typically for 12 or 24 months or I am using the platform auto-bid/auto-invest system.
In p2p 18%
On one platform 25%
In one loan 3%
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