ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Mar 17, 2015 8:58:26 GMT
It might be that my memory is starting to go. I have had a quick search and I can't find the statement I was looking for. I think I read most of Chris' posts. I will have a more thorough search this evening. If it's what I'm remembering it came from back in October when the new platform was going live, and I think it went into the FAQ on the subject relating to the purchase and sales process. So, the post that bugs4me has remembered is more recent. I wouldn't however read that as priority for underwriters, just weighted in their favour, with others still having some opportunity to sell.
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bugs4me
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Post by bugs4me on Mar 17, 2015 9:49:01 GMT
It might be that my memory is starting to go. I have had a quick search and I can't find the statement I was looking for. I think I read most of Chris' posts. I will have a more thorough search this evening. If it's what I'm remembering it came from back in October when the new platform was going live, and I think it went into the FAQ on the subject relating to the purchase and sales process. So, the post that bugs4me has remembered is more recent. I wouldn't however read that as priority for underwriters, just weighted in their favour, with others still having some opportunity to sell. It's probably largely irrelevant now that the GEIA has mopped up most of the UW's units that were available on the AM. There's very little there now.
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mikes1531
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Post by mikes1531 on Mar 17, 2015 16:12:26 GMT
If it's what I'm remembering it came from back in October when the new platform was going live, and I think it went into the FAQ on the subject relating to the purchase and sales process. So, the post that bugs4me has remembered is more recent. I wouldn't however read that as priority for underwriters, just weighted in their favour, with others still having some opportunity to sell. It's probably largely irrelevant now that the GEIA has mopped up most of the UW's units that were available on the AM. There's very little there now. Only the £140k of #112. There's also nearly £400k of #143 'available', but that's been suspended from sale as the result of the decision not to revalue that project because of the failure to commission some of the WTs by the FiT deadline. Considering the impact this unavailability has any new GEIA investments, I might have thought AC would want that revaluing done so as to increase the viability/liquidity of the GEIA. Unless, of course, AC know the revaluation would increase the LTV so much that it would not be appropriate to allow #143 to be purchased for GEIAs.
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ching
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Post by ching on Mar 17, 2015 22:11:26 GMT
Thanks folks for the responses to my question. I had thought that the 7% would be earned from day 1, not based on availability and allocation of loans. I though it similar to the Wellesley product whereby you earn straight away, but you could lose capital if the underlying debt defaults. I'll give this some more thought.
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Post by chris on Mar 17, 2015 22:22:44 GMT
Thanks folks for the responses to my question. I had thought that the 7% would be earned from day 1, not based on availability and allocation of loans. I though it similar to the Wellesley product whereby you earn straight away, but you could lose capital if the underlying debt defaults. I'll give this some more thought. As we sort out the supply side of the equation with some new loans, and there should be a couple drawing down fairly soon, then it effectively will work like that. But there need to be loans available to invest in for your funds to earn interest. There is a discretionary provision fund and the underlying security protecting your capital, but of course there is still a risk you could lose your money.
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bugs4me
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Post by bugs4me on Mar 17, 2015 22:30:20 GMT
Thanks folks for the responses to my question. I had thought that the 7% would be earned from day 1, not based on availability and allocation of loans. I though it similar to the Wellesley product whereby you earn straight away, but you could lose capital if the underlying debt defaults. I'll give this some more thought. As we sort out the supply side of the equation with some new loans, and there should be a couple drawing down fairly soon, then it effectively will work like that. But there need to be loans available to invest in for your funds to earn interest. There is a discretionary provision fund and the underlying security protecting your capital, but of course there is still a risk you could lose your money. - think the GEIA did a good job at mopping up the 'surplus' of WT loans that were available originally when it was first launched. Now would be a good time to relax the 20% 'rule' during times of wind famine and rebalance as and when more WT's become available. As I've posted before, I could never get 100% investment with my GEIA experiment - managed c69%. So as there were no WT's available on the AM I bailed out and invested direct albeit without the PF protection. But 69% equated to 4.83% - not a good investment in my case.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Mar 17, 2015 22:36:11 GMT
As we sort out the supply side of the equation with some new loans, and there should be a couple drawing down fairly soon, then it effectively will work like that. But there need to be loans available to invest in for your funds to earn interest. There is a discretionary provision fund and the underlying security protecting your capital, but of course there is still a risk you could lose your money. - think the GEIA did a good job at mopping up the 'surplus' of WT loans that were available originally when it was first launched. Now would be a good time to relax the 20% 'rule' during times of wind famine and rebalance as and when more WT's become available. As I've posted before, I could never get 100% investment with my GEIA experiment - managed c69%. So as there were no WT's available on the AM I bailed out and invested direct albeit without the PF protection. But 69% equated to 4.83% - not a good investment in my case. How about AC offering 1% cashback on the sale of some hard to get WT's so that the balance of WT's in the GEIA gets equalised.
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Post by chris on Mar 17, 2015 22:37:10 GMT
As we sort out the supply side of the equation with some new loans, and there should be a couple drawing down fairly soon, then it effectively will work like that. But there need to be loans available to invest in for your funds to earn interest. There is a discretionary provision fund and the underlying security protecting your capital, but of course there is still a risk you could lose your money. - think the GEIA did a good job at mopping up the 'surplus' of WT loans that were available originally when it was first launched. Now would be a good time to relax the 20% 'rule' during times of wind famine and rebalance as and when more WT's become available. As I've posted before, I could never get 100% investment with my GEIA experiment - managed c69%. So as there were no WT's available on the AM I bailed out and invested direct albeit without the PF protection. But 69% equated to 4.83% - not a good investment in my case. I've suggested it internally so it's a possibility. We need to examine how that would affect the provision fund, as that needs macro diversification rather than at the individual investor level, and also as a change in terms it'd probably need to be released as the GEIA series 2. If that happens then the GEIA series 1 would be closed to new investment and only visible to those with funds already invested. Perhaps we could avoid that if, as you suggest, it were only a temporary change but that would need to go past our compliance and legal teams. I have been assured however that there will be a new large loan drawing down very shortly and that there are a number of other WT deals in the pipeline that should solve the supply problems regardless of any other changes we make.
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bugs4me
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Post by bugs4me on Mar 17, 2015 22:55:11 GMT
chris - think the GEIA did a good job at mopping up the 'surplus' of WT loans that were available originally when it was first launched. Now would be a good time to relax the 20% 'rule' during times of wind famine and rebalance as and when more WT's become available. As I've posted before, I could never get 100% investment with my GEIA experiment - managed c69%. So as there were no WT's available on the AM I bailed out and invested direct albeit without the PF protection. But 69% equated to 4.83% - not a good investment in my case. I've suggested it internally so it's a possibility. We need to examine how that would affect the provision fund, as that needs macro diversification rather than at the individual investor level, and also as a change in terms it'd probably need to be released as the GEIA series 2. If that happens then the GEIA series 1 would be closed to new investment and only visible to those with funds already invested. Perhaps we could avoid that if, as you suggest, it were only a temporary change but that would need to go past our compliance and legal teams. I have been assured however that there will be a new large loan drawing down very shortly and that there are a number of other WT deals in the pipeline that should solve the supply problems regardless of any other changes we make. Sorry you've lost me there as the 20% was an internal decision no doubt based upon an actuarial opinion regarding the PF. Certainly IMO it would fall outside of FCA compliance and only minimal amendments would be required to the T&C's. I cannot see the point in releasing a GEIA mk2 as there will always be feast and famine. ATM, from an investor viewpoint, there is little incentive to become involved in the GEIA. Okay, if the pipeline WT's do eventually materialise then that will overcome the problem but for how long. Currently I feel that the headline projected 7% is misleading as whilst this may be covered in the small print somewhere, nonetheless it is something that may (although hopefully not) be challenged by the FCA at some point in the future as it potentially does not comply and fails the FCA TCF requirements.
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Post by chris on Mar 17, 2015 23:01:11 GMT
I've suggested it internally so it's a possibility. We need to examine how that would affect the provision fund, as that needs macro diversification rather than at the individual investor level, and also as a change in terms it'd probably need to be released as the GEIA series 2. If that happens then the GEIA series 1 would be closed to new investment and only visible to those with funds already invested. Perhaps we could avoid that if, as you suggest, it were only a temporary change but that would need to go past our compliance and legal teams. I have been assured however that there will be a new large loan drawing down very shortly and that there are a number of other WT deals in the pipeline that should solve the supply problems regardless of any other changes we make. Sorry you've lost me there as the 20% was an internal decision no doubt based upon an actuarial opinion regarding the PF. Certainly IMO it would fall outside of FCA compliance and only minimal amendments would be required to the T&C's. I cannot see the point in releasing a GEIA mk2 as there will always be feast and famine. ATM, from an investor viewpoint, there is little incentive to become involved in the GEIA. Okay, if the pipeline WT's do eventually materialise then that will overcome the problem but for how long. Currently I feel that the headline projected 7% is misleading as whilst this may be covered in the small print somewhere, nonetheless it is something that may (although hopefully not) be challenged by the FCA at some point in the future as it potentially does not comply and fails the FCA TCF requirements. My point on compliance / legal is that it would be a change in the terms of the investment account thus falls under the TCF rules and any provisions in the terms themselves. Hence my need to refer that internally as it's not a decision I can take unilaterally. There's always the risk of feast or famine in the future, it's a balancing act that all platforms have to manage. Our target is for the 20% to be the worst case rather than the norm so ideally we'd have more than enough in the pipeline going forward to keep lenders away from that limit.
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bugs4me
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Post by bugs4me on Mar 17, 2015 23:07:44 GMT
Sorry you've lost me there as the 20% was an internal decision no doubt based upon an actuarial opinion regarding the PF. Certainly IMO it would fall outside of FCA compliance and only minimal amendments would be required to the T&C's. I cannot see the point in releasing a GEIA mk2 as there will always be feast and famine. ATM, from an investor viewpoint, there is little incentive to become involved in the GEIA. Okay, if the pipeline WT's do eventually materialise then that will overcome the problem but for how long. Currently I feel that the headline projected 7% is misleading as whilst this may be covered in the small print somewhere, nonetheless it is something that may (although hopefully not) be challenged by the FCA at some point in the future as it potentially does not comply and fails the FCA TCF requirements. My point on compliance / legal is that it would be a change in the terms of the investment account thus falls under the TCF rules and any provisions in the terms themselves. Hence my need to refer that internally as it's not a decision I can take unilaterally. There's always the risk of feast or famine in the future, it's a balancing act that all platforms have to manage. Our target is for the 20% to be the worst case rather than the norm so ideally we'd have more than enough in the pipeline going forward to keep lenders away from that limit. - it's time we both went off to zzzland. The FCA TCF can be or indeed is a minefield but unless and within a reasonable period of time a lender/investor - probably the passive variety attains the projected 7% then it does not comply with the Outcome 5 as listed by the FCA namely:- Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect. Source - FCA linkNow off to zzzland - suggest you do the same.
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sl75
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Post by sl75 on Mar 19, 2015 9:46:10 GMT
It seems to me that the GEIA was designed around the assumption that there would be an ongoing pipeline of new "green" loans feeding into it to keep everyone satisfied.
In the worst case (where all new loans sell out as soon as the loan draws down and no other units become available on the aftermarket), a small investor (whose maximum stake per loan is within the per-lender allocation during this initial distribution) would be fully invested within the time it takes for 5 loans to draw down.
In practice, under current market conditions, as each loan draws down it should not be selling out instantly (and as long as this is maintained, investors of ALL sizes should be fully invested within 5 loans drawing down). This also allows an opportunity for existing investors to diversify (and by specification, albeit not necessarily implementation, the GEIA should also be doing this) thereby making units of older loans more easily available each time a new loan draws down. A small investor could then be fully invested even from a single new GEIA-eligible loan drawing down.
The fundamental problem seems to me that there has not been a single new GEIA-eligible loan that has drawn down since the fund launched. There were a couple of loans that arguably SHOULD have been GEIA-eligible, but one is now blocked from being traded, and the other had fully sold out on the aftermarket before anyone thought to enable it for GEIA investment.
I'd tend to expect the new AD plant to cause a bit of a shake-up of the GEIA accounts - the first and most obvious effect would be anyone who is not already 100% invested should get a 20% chunk of their investment put into that loan...
... but there should also be a secondary effect where existing GEIA investors reduce their exposure to several other loans in order to gain exposure to the new one. Even if the GEIA doesn't do this automatically (which by specification it arguably should be doing), some investors may decide to manually trigger it by (for example) asking the GEIA to withdraw, say, 10% of their investment and then add the same amount back in an attempt to persuade it to buy a chunk of the new loan... and of course there'll be investors who are using the MLIA, some of whom may also choose to diversify (and this goes for ANY new loan drawing down, not just a "green" one).
As such, the smallest GEIA investors may well be able to become fully invested just from the shake-up from a single new loan drawing down.
Really it's up to AC to deliver the promised pipeline of green "jam" (delivery due "tomorrow"?)...
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