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Post by stuartassetzcapital on Apr 7, 2020 14:06:09 GMT
Hello all In answer to some valid questions raised on this forum and via our support desk we are updating the FAQs and also posting a summary here. We can confirm that: - The Access Accounts are not funding new loans at this time. Any potential new loans visible in the queue to be drawn soon should not be considered to change this position. Funding of new loans would slow withdrawals and so we have stopped that activity for the time being to focus on existing borrowers and their lenders.
- Interest receipts from loans held in the Access Accounts are applied to the payment of investor interest as usual, subject to the target rate caps. We have NOT paused lender interest as some platforms have, as we carry substantial cash retentions to pay interest for some time on many loans.
- Liquidity coming into the Access Accounts from loan capital repayments of all types (partial or full loan redemptions) presently goes to fund a mix of withdrawal requests and further drawdowns that borrowers require on existing loans in your own portfolio. Ceasing to do this would cause detriment and material losses for investors and we will not do that if possible.
- Any new deposits from lenders, of which there are many hundreds of those a week at present, funds a mix of withdrawals and those further drawdowns required on existing loans, as above.
- The flat distribution of money available for withdrawal across all members in the withdrawal queue is the fairest situation whilst the Access Accounts are below a Minimum Operating Level (MOL), which we entered on the 12th March 2020. The MOL is calculated from a combination of factors, some forward looking, and it is not simply the cash balance in the Access Accounts.
- Once we are above the MOL we intend to revert to a FIFO (first in first out) queue system again, serving the oldest queue members first. If we fall below the MOL we will again revert to a flat distribution method of the same sum per withdrawal queue member.
- In the meantime, we are hoping to release a function shortly to allow people to crystallise their loan holdings and their correct share of uninvested cash out of the Access Accounts and into a new loan holding account. That is an irrevocable exit from the Access Accounts The rest of the loans will repay by monthly amortisations or end of term/ early redemptions as normal.
- As an alternative investor choice, we are exploring the possibility of an Access Accounts trading feature which would allow a choice to sell some or all of your Quick Access Account investment at a discount, subject to other investor demand at that price. This would allow you to list some or all of your Quick Access Account holdings (not individual loans) for sale to another investor. Quick Access Account holdings listed this way at a discount would likely sell faster in present market conditions than waiting for the queue, provided investor demand existed at a mutually agreeable price. This is not understood to be available on other platforms and would benefit larger investors wanting to create forced liquidity for themselves via discounts or for smaller investors having immediate need of some cash right away for Coronavirus related reasons for example.
- We are aiming to have the withdrawal queue functioning normally again as soon as possible, through new features and also through normalisation of the market in due course.
- We do not intend to raise the Lender fee from its present 0.075% pm, unlike some higher fees introduced by a number of other platforms, and instead plan to reduce this fee as soon as practical. At this time, we have no indication other than the Government approximate indication of 3 months for the approximate end of the business lock down period, meaning that the fee is at present likely to be in place for May-July inclusive.
I hope that this helps. |
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alanh
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Post by alanh on Apr 7, 2020 15:33:25 GMT
Hello all In answer to some valid questions raised on this forum and via our support desk we are updating the FAQs and also posting a summary here. We can confirm that: - The Access Accounts are not funding new loans at this time. Any potential new loans visible in the queue to be drawn soon should not be considered to change this position. Funding of new loans would slow withdrawals and so we have stopped that activity for the time being to focus on existing borrowers and their lenders.
- Interest receipts from loans held in the Access Accounts are applied to the payment of investor interest as usual, subject to the target rate caps. We have NOT paused lender interest as some platforms have, as we carry substantial cash retentions to pay interest for some time on many loans.
- Liquidity coming into the Access Accounts from loan capital repayments of all types (partial or full loan redemptions) presently goes to fund a mix of withdrawal requests and further drawdowns that borrowers require on existing loans in your own portfolio. Ceasing to do this would cause detriment and material losses for investors and we will not do that if possible.
- Any new deposits from lenders, of which there are many hundreds of those a week at present, funds a mix of withdrawals and those further drawdowns required on existing loans, as above.
- The flat distribution of money available for withdrawal across all members in the withdrawal queue is the fairest situation whilst the Access Accounts are below a Minimum Operating Level (MOL), which we entered on the 12th March 2020. The MOL is calculated from a combination of factors, some forward looking, and it is not simply the cash balance in the Access Accounts.
- Once we are above the MOL we intend to revert to a FIFO (first in first out) queue system again, serving the oldest queue members first. If we fall below the MOL we will again revert to a flat distribution method of the same sum per withdrawal queue member.
- In the meantime, we are hoping to release a function shortly to allow people to crystallise their loan holdings and their correct share of uninvested cash out of the Access Accounts and into a new loan holding account. That is an irrevocable exit from the Access Accounts The rest of the loans will repay by monthly amortisations or end of term/ early redemptions as normal.
- As an alternative investor choice, we are exploring the possibility of an Access Accounts trading feature which would allow a choice to sell some or all of your Quick Access Account investment at a discount, subject to other investor demand at that price. This would allow you to list some or all of your Quick Access Account holdings (not individual loans) for sale to another investor. Quick Access Account holdings listed this way at a discount would likely sell faster in present market conditions than waiting for the queue, provided investor demand existed at a mutually agreeable price. This is not understood to be available on other platforms and would benefit larger investors wanting to create forced liquidity for themselves via discounts or for smaller investors having immediate need of some cash right away for Coronavirus related reasons for example.
- We are aiming to have the withdrawal queue functioning normally again as soon as possible, through new features and also through normalisation of the market in due course.
- We do not intend to raise the Lender fee from its present 0.075% pm, unlike some higher fees introduced by a number of other platforms, and instead plan to reduce this fee as soon as practical. At this time, we have no indication other than the Government approximate indication of 3 months for the approximate end of the business lock down period, meaning that the fee is at present likely to be in place for May-July inclusive.
I hope that this helps. Thanks Stuart, it does help. It answers some questions and raises a few others. It is good to know that new loans are not being funded and that you are focusing on existing borrowers/lenders. It is also good to know that the access account crystallization system is being released shortly and that you are looking at the access account trading feature. The MOL raises a few questions as although you have described it, we have no idea if we are above it, below it, close to it or whatever. Can you provide any more information so that it is possible for investors to assess this? To put it bluntly, as a so called "large investor looking to get out" I currently do not know whether to:
1) Take the, seemingly imminent, crystallization option which comes with the prospect of a bunch of loans already in default and the need to sell around 600 loans manually, some at heavy discounts 2) Wait for secondary trading of access accounts option - much cleaner and better than option 1 above, but with unknown timing as yet and unknown discount needed to sell 3) Wait for us to get back above the MOL - completely in the dark on this one unless you can give us a few more clues
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victors
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Post by victors on Apr 7, 2020 15:44:02 GMT
Thanks Stuart.
As a larger investor, it's nice to see our concerns being taken on board.
Let's hope it follows through.
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agent69
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Post by agent69 on Apr 7, 2020 15:45:38 GMT
Thanks Stuart, it does help. It answers some questions and raises a few others. It is good to know that new loans are not being funded and that you are focusing on existing borrowers/lenders. It is also good to know that the access account crystallization system is being released shortly and that you are looking at the access account trading feature. The MOL raises a few questions as although you have described it, we have no idea if we are above it, below it, close to it or whatever. Can you provide any more information so that it is possible for investors to assess this? To put it bluntly, as a so called "large investor looking to get out" I currently do not know whether to:
1) Take the, seemingly imminent, crystallization option which comes with the prospect of a bunch of loans already in default and the need to sell around 600 loans manually, some at heavy discounts 2) Wait for secondary trading of access accounts option - much cleaner and better than option 1 above, but with unknown timing as yet and unknown discount needed to sell 3) Wait for us to get back above the MOL - completely in the dark on this one unless you can give us a few more clues My thoughts entirely. Why is a flat repayment rate fairest if we are £1 below the MOL, but FIFO fairest if we are £1 above it?
As a small investor I am encouraged at the potential return of the FIFO that I signed up to (even though I may not benefit from it), but without knowing either the Minimum or Current operating levels I get the impression that I am still p*ssing in the wind.
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puddleduck
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Post by puddleduck on Apr 7, 2020 17:58:11 GMT
stuartassetzcapital As an alternative investor choice, we are exploring the possibility of an Access Accounts trading feature which would allow a choice to sell some or all of your Quick Access Account investment at a discountCan I suggest that if you decide to implement a secondary market for discounted Access account parts, that any parts acquired via discount cannot be immediately queued up for sale back onto the QAA by the purchaser - otherwise this move won't really help queue reduction and would encourage 'flippers'. Need to encourage new money with intent to 'hold'
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rogedavi
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Post by rogedavi on Apr 7, 2020 18:25:09 GMT
fairness
/ˈfɛːnəs/
noun
noun: fairness
1.
impartial and just treatment or behaviour without favouritism or discrimination.
This seems to be at odds with the pooled withdrawals seemingly favouring smaller over larger investors.
Can you please elaborate on why you consider it to be fair to not use a proportional system?
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alender
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Post by alender on Apr 7, 2020 19:01:56 GMT
If there is an AA account trading market then this will intermediately stop any new money being added to AA and slow the progress of those wishing to get out without selling at discount but are happy to wait in the hope things will improve. However it may be a long wait (if ever) to get out unless we see substantial increase in confidence.
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mark
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Post by mark on Apr 7, 2020 20:03:14 GMT
author=" stuartassetzcapital" source="/post/380021/thread" timestamp="1586268369"]Hello all In answer to some valid questions raised on this forum and via our support desk we are updating the FAQs and also posting a summary here. We can confirm that: - The Access Accounts are not funding new loans at this time. Any potential new loans visible in the queue to be drawn soon should not be considered to change this position. Funding of new loans would slow withdrawals and so we have stopped that activity for the time being to focus on existing borrowers and their lenders.
- Interest receipts from loans held in the Access Accounts are applied to the payment of investor interest as usual, subject to the target rate caps. We have NOT paused lender interest as some platforms have, as we carry substantial cash retentions to pay interest for some time on many loans.
- Liquidity coming into the Access Accounts from loan capital repayments of all types (partial or full loan redemptions) presently goes to fund a mix of withdrawal requests and further drawdowns that borrowers require on existing loans in your own portfolio. Ceasing to do this would cause detriment and material losses for investors and we will not do that if possible.
- Any new deposits from lenders, of which there are many hundreds of those a week at present, funds a mix of withdrawals and those further drawdowns required on existing loans, as above.
- The flat distribution of money available for withdrawal across all members in the withdrawal queue is the fairest situation whilst the Access Accounts are below a Minimum Operating Level (MOL), which we entered on the 12th March 2020. The MOL is calculated from a combination of factors, some forward looking, and it is not simply the cash balance in the Access Accounts.
- Once we are above the MOL we intend to revert to a FIFO (first in first out) queue system again, serving the oldest queue members first. If we fall below the MOL we will again revert to a flat distribution method of the same sum per withdrawal queue member.
- In the meantime, we are hoping to release a function shortly to allow people to crystallise their loan holdings and their correct share of uninvested cash out of the Access Accounts and into a new loan holding account. That is an irrevocable exit from the Access Accounts The rest of the loans will repay by monthly amortisations or end of term/ early redemptions as normal.
- As an alternative investor choice, we are exploring the possibility of an Access Accounts trading feature which would allow a choice to sell some or all of your Quick Access Account investment at a discount, subject to other investor demand at that price. This would allow you to list some or all of your Quick Access Account holdings (not individual loans) for sale to another investor. Quick Access Account holdings listed this way at a discount would likely sell faster in present market conditions than waiting for the queue, provided investor demand existed at a mutually agreeable price. This is not understood to be available on other platforms and would benefit larger investors wanting to create forced liquidity for themselves via discounts or for smaller investors having immediate need of some cash right away for Coronavirus related reasons for example.
- We are aiming to have the withdrawal queue functioning normally again as soon as possible, through new features and also through normalisation of the market in due course.
- We do not intend to raise the Lender fee from its present 0.075% pm, unlike some higher fees introduced by a number of other platforms, and instead plan to reduce this fee as soon as practical. At this time, we have no indication other than the Government approximate indication of 3 months for the approximate end of the business lock down period, meaning that the fee is at present likely to be in place for May-July inclusive.
I hope that this helps. [/quote] This is encouraging positive news of progress in a moderately short period of time since the commencement of the worldwide financial crisis and Assetz Capital's sensible, understandable safeguarding measures being put in place. Judging by the number of supportive 'likes' to the CEO's update to the planned, and soon to be actioned measures, this approach has wide support. With a multitude of different stakeholder concerns and interests to deal with in this chaos, with the complexity of interrelated decisions, appreciation where it due to the Assetz Capital's board in seeking to achieve the best possible outcome, in extremely difficult circumstances, rather than the impossible. In my opinion, seeking, as far as can be achieved, fairness for the majority of all, being lenders, borrowers and the company rather than attempting an easier route or to placate or satisfy the very angry few. All stakeholders have equally valid concerns. Some valid concerns are NOT more equal than others just because of your own personal story or level of investment. |
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alanh
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Post by alanh on Apr 7, 2020 20:48:24 GMT
Three things my grandpa taught me about liquidity: - liquidity is for the few not the many - liquidity can’t be created out of thin air - liquidity can be robbed from Paul to aid Peter. Alchemy and illusions were the bedrock of the short dated Access Accounts. I struggle to see any quick solutions to the AC liquidity train crash and any that appear to be might be built on alchemy and illusion too. The secondary market trading of access accounts is a quick solution
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alanh
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Post by alanh on Apr 7, 2020 21:17:21 GMT
The secondary market trading of access accounts is a quick solution And would the primary market be closed? That is no new money into QAA, 30DA and 90DAA? Depends how they did it I suppose but whether it was closed or open I doubt it would attract much money if the secondary market was trading at a discount.
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Post by Harland Kearney on Apr 7, 2020 21:41:05 GMT
I would rater not panic sell my queue at -20-25% loss. Not when the money in P2P isnt' critical money for me, but I know others are not in the same boat at all right now. I'm happy for it to be repaid to me over next 6-12 months. If this became impossible because you could only sell at a discount, I think the out cry will be far greater than the pool system right now... Least I'd be pretty p**sed that I'm trapped in now.
The issue with allowing sell outs at -20% is this might attract sellers, but also offers a valuation point from the outside that might be very steep to start with. People will ask, why the hell is this product so over discounted? I guess currently you could say this about the MLA, but that isn't the whole loan book at that point. I'm gussing vultures will buy up such large discounts reguardless.
Likely moving into the MLA would be the best solution. More vultures will take your loans off you for high panic discounts if thats when u need cash.
Unlike the other changes AC have made so far, messing up with selling AA's at a discount could be leathal if they fu**ed it up. Not all investors want to be under cut so violently for some who panic to the exit because they in the wrong product.
Anyway, love the thread AC, this is sort of comms this board needs. Thanks!
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alender
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Post by alender on Apr 8, 2020 9:52:46 GMT
If a secondary market was made for AA there would have to be strict rules about withdrawals/interest otherwise the AA holders who are in the pool for payments would be worse off.
Let say B Lender needs cash, he has £200,000 in the QAA pool for payments, less now is coming out as no new money entries the AA accounts because you can buy in at a discount. He can't wait so he sells £100,000 at 20% discount.
Then 80 small lenders buy £1000 each.
They all request withdrawals (why not, when paid out 25% profit + interest while waiting) therefore the withdrawal pool has 80 new people, the small lenders gets out quite quickly due to the disproportionate payment system. Not only has B Lender lost £20,000 but he payouts decrease due to the new entrants in the pool. When the the small lenders are paid out they get £1250 + interest, they will think I like this game, I will do it again.
At the very least these discounted accounts must be subordinate to money currently in the AA and must not be paid out during this or any future liquidity events, perhaps interest can also be withheld while a liquidly event is in progress.
If no restrictions are in place it will accelerate the reduction in quality of the loan book of any large lender as they will be get less money out and will end up with more bad loans.
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alanh
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Post by alanh on Apr 8, 2020 9:59:16 GMT
I would rater not panic sell my queue at -20-25% loss. Not when the money in P2P isnt' critical money for me, but I know others are not in the same boat at all right now. I'm happy for it to be repaid to me over next 6-12 months. If this became impossible because you could only sell at a discount, I think the out cry will be far greater than the pool system right now... Least I'd be pretty p**sed that I'm trapped in now. The issue with allowing sell outs at -20% is this might attract sellers, but also offers a valuation point from the outside that might be very steep to start with. People will ask, why the hell is this product so over discounted? I guess currently you could say this about the MLA, but that isn't the whole loan book at that point. I'm gussing vultures will buy up such large discounts reguardless. Likely moving into the MLA would be the best solution. More vultures will take your loans off you for high panic discounts if thats when u need cash. Unlike the other changes AC have made so far, messing up with selling AA's at a discount could be leathal if they fu**ed it up. Not all investors want to be under cut so violently for some who panic to the exit because they in the wrong product. Anyway, love the thread AC, this is sort of comms this board needs. Thanks! I don't think there is a problem with having a secondary market and people being able to see the discount. Variable pricing markets exist everywhere and its how things find the right level. The alternative is a huge demand vs supply imbalance which is what we have here whereby there is a wall of investments for sale at par and very few buyers to chip away at it. I also don't think the switch to the MLA is the best solution. It is a solution, for sure, but would then involve having to manually list 500 or 600 loan parts and then monitor them day to day to adjust the discount if necessary. The secondary access market solution would just involve one simple sell to a buyer and thats it, much cleaner and simpler.
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IFISAcava
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Post by IFISAcava on Apr 8, 2020 10:06:31 GMT
I would rater not panic sell my queue at -20-25% loss. Not when the money in P2P isnt' critical money for me, but I know others are not in the same boat at all right now. I'm happy for it to be repaid to me over next 6-12 months. If this became impossible because you could only sell at a discount, I think the out cry will be far greater than the pool system right now... Least I'd be pretty p**sed that I'm trapped in now. The issue with allowing sell outs at -20% is this might attract sellers, but also offers a valuation point from the outside that might be very steep to start with. People will ask, why the hell is this product so over discounted? I guess currently you could say this about the MLA, but that isn't the whole loan book at that point. I'm gussing vultures will buy up such large discounts reguardless. Likely moving into the MLA would be the best solution. More vultures will take your loans off you for high panic discounts if thats when u need cash. Unlike the other changes AC have made so far, messing up with selling AA's at a discount could be leathal if they fu**ed it up. Not all investors want to be under cut so violently for some who panic to the exit because they in the wrong product. Anyway, love the thread AC, this is sort of comms this board needs. Thanks! I don't think there is a problem with having a secondary market and people being able to see the discount. Variable pricing markets exist everywhere and its how things find the right level. The alternative is a huge demand vs supply imbalance which is what we have here whereby there is a wall of investments for sale at par and very few buyers to chip away at it. I also don't think the switch to the MLA is the best solution. It is a solution, for sure, but would then involve having to manually list 500 or 600 loan parts and then monitor them day to day to adjust the discount if necessary. The secondary access market solution would just involve one simple sell to a buyer and thats it, much cleaner and simpler. Exactly what I have been doing - v time consuming indeed. Huge opportunity cost. On the other hand I have liquidated 57% of my MLA, albeit at a cost to the XIRR of -0.65%. I am going to stick in some low LTV loans in areas less affected by COVID-19 - or at last put in a par sale queue and wait.
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Post by Harland Kearney on Apr 8, 2020 10:26:28 GMT
I would rater not panic sell my queue at -20-25% loss. Not when the money in P2P isnt' critical money for me, but I know others are not in the same boat at all right now. I'm happy for it to be repaid to me over next 6-12 months. If this became impossible because you could only sell at a discount, I think the out cry will be far greater than the pool system right now... Least I'd be pretty p**sed that I'm trapped in now. The issue with allowing sell outs at -20% is this might attract sellers, but also offers a valuation point from the outside that might be very steep to start with. People will ask, why the hell is this product so over discounted? I guess currently you could say this about the MLA, but that isn't the whole loan book at that point. I'm gussing vultures will buy up such large discounts reguardless. Likely moving into the MLA would be the best solution. More vultures will take your loans off you for high panic discounts if thats when u need cash. Unlike the other changes AC have made so far, messing up with selling AA's at a discount could be leathal if they fu**ed it up. Not all investors want to be under cut so violently for some who panic to the exit because they in the wrong product. Anyway, love the thread AC, this is sort of comms this board needs. Thanks! I don't think there is a problem with having a secondary market and people being able to see the discount. Variable pricing markets exist everywhere and its how things find the right level. The alternative is a huge demand vs supply imbalance which is what we have here whereby there is a wall of investments for sale at par and very few buyers to chip away at it. I also don't think the switch to the MLA is the best solution. It is a solution, for sure, but would then involve having to manually list 500 or 600 loan parts and then monitor them day to day to adjust the discount if necessary. The secondary access market solution would just involve one simple sell to a buyer and thats it, much cleaner and simpler. I dont' disagree at all, but only if its implemented correctly. My worry isn't giving others the option to discount, but what about those who want to orderly exit over a long period of time (those that priced in such a event) Do we now have to wait even longer for capital repayments only (how would that even work, its not even true capital repayments now)? Are we denied new money flowing in, unless we give up -x% of our holding, worse are denied to even be able to sell without discounting...? They are big questions, and I'm not sure anybody has a magical answer to do both at the same time right now. We are aiming to have the withdrawal queue functioning normally again as soon as possible, through new features and also through normalisation of the market in due course.
Seems they already have someting in mind, lets hope it doesn't backfire for investors who are not panic selling.
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