I've been investing mainly for yield, but I now feel VERY over-exposed to Property Partner (especially in the light of recent developments) and would like to reduce my exposure. Two strategies suggest themselves:
1. Sell poor performing properties (which will involve taking some losses). This leaves me with a better portfolio, but still at risk from platform failure.
2. Sell better performing properties (which I can do at a profit). This leaves me with the "dross" in the hope that PP lasts long enough to be able to sell at the 5 year mark.
Bearing in mind PPs problems and a weak housing market, what would you do in a similar situation? What factors would you take into account?
I can't help feel there's a basic investing principle that would give the "right" answer to this problem.
Currently I can't decide the best approach, so I'm doing nothing - which is almost certainly NOT the right answer!
I have sold all but one holding since the AUM charge imposition.
My strategy was to sell those with a longer life remaining first - how long will PP survive? I didn't worry about what I had paid, I compared my potential exit price to the (possibly flawed) fair value price and sold anything close to or better than fair value. Next I looked at the poor performing properties, is the poor performance likely to persist or might it be temporary? In the former case I sold straight away, whereas with the latter it might be worth keeping them.
Finally remember that the AUM charge is on the "official" valuation price, not on the potential sale price.
Last Edit: Oct 5, 2019 14:02:22 GMT by bigfoot12: Tidied up my wording
I just dumped everything in a firesale because I wanted out of a company that would act unethically.
I took a big hit but overall made 17k profit over 4 years so just glad to be out. Would have done a lot better if I’d just invested in my global equity tracker and a lot worse if I hadn’t flipped golden fxxt for 4 k profit
I used to have a diversified portfolio on PP. Now I am investing in their loans. My current XIRR (excluding accrued interest) is 4.85%, after rebalancing my portfolio. It hasn't delivered >6% due to short term performance, but it's acceptable without overall loss.
I got very lucky with these revaluations. I don't have much in PP, but due to a certain elevated and fortified development my XIRR rose from 0.5% to 14%. Was planning on running down due to retroactive fees (already transferred uninvested ISA pot). Now I'm not so sure.
Worth noting that they didn't charge the £35 ISA transfer out fee, which their Ts&Cs say they are entitled to.