happy
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Post by happy on Apr 11, 2020 21:01:41 GMT
Millions of pounds of cash building up in AC access accounts but they don't seem to want to release it to investors...Just does not make any sense to me. Should have put it into an instant access cash account somewhere, now paying about 0.25% interest, if you are lucky. You need to forget who gets paid how much when, this is a distraction and will be of little importance to anyone beyond the next few weeks or so. Beyond that all bets are off as to how much your invested money is actually worth. What you and the few others trying to destroy AC managements credibility here totally fail to realise is the value of yours, mine and everyone else's money in intrinsically linked to two things: 1. the value of the underlying businesses and assets that our money is invested in and 2. the success of AC as a viable business So with respect to point 1, If projects fail due to the collapse of the funding pipeline the result is partially completed developments - maybe 25-50% of your money back. Point 2 is demonstrated by the huge hit that investors have taken (and are still taking) funding the wind-down costs in the multiple P2P business failures we have witnessed over the last year or so - a 50-75% return might be seen as a very good result in this scenario. So lets be really clear here, you didn't invest in an instant access cash account and you knew this, you were never guaranteed instant access in all situation and your knew this also. The return of your investment has always depended on two things, the cash pool/new inward investment being available within the account and the value of the underlying assets/Provision Fund and you really should have know this if you had read any of the documentation available to you as a potential investor. In these unprecedented times if AC so chooses to it could suspend all access to all investments and quite easily legally justify this action. Many investment vehicles have done this in the past with any legal challenges having very limited success. What I would like you to focus on is not how quickly can you get my money back but the reality that, if things go really bad, you may never get all your money back. Worse still, you may have to wait years to get any of it back at all. So while you are trying to hammer another nail into the coffin of AC remember, without a properly functioning AC, ever getting your hands on your money again becomes an even less certain outcome. So I believe the reason why I and the overwhelming majority of AC investors support what AC management are doing right now is because their actions have put in place the supports required to ensure the survival of the underlying projects and businesses and the continued viability of AC. Surely you must understand this.... Oh by the way, did you know that there is currently a global virus pandemic that is about to wipe multiple double digit percentage figures off most of the major economies of the world and could potentially disrupt global trade and travel for maybe another year or two 
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alanh
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Post by alanh on Apr 11, 2020 21:30:06 GMT
We all took risks with our investments and are now facing losses across many asset classes. Thats how the cycle goes. The situation is made considerably worse on AC for large investors as they are now being forced to bail out all the smaller investors. AC management have decided that if you are a small investor on this platform you should not be allowed to suffer any losses like everyone else - you should get them reimbursed by one of the bigger investors on the platform. Personally I think the management of AC have made a series of spectacularly shortsighted decisions that have placed the future of their platform in doubt. I have sympathy with your position but given the vast majority of repayments are currently being withheld by AC and they have stated they are intending to move back to a proper queue system then surely the numbers involved are really negligible for a larger investor? Also, when we do move back to a queue by withdrawal date, won't we have the same argument that those at the front of the queue are are being bailed out by those behind them despite everyone having a withdrawal request in? I think as it currently stands with the payments we have all received you are correct, its negligible. The issue here is the moving back to the proper queue system. If you look around the landscape at the moment its clear there is money exiting all platforms either sitting in queues or being offered at large discounts on secondary markets. These queues are not small and nor is AC's. The only way the queue will normalise is for the balance of demand and supply to come back into line and there is little sign of that happening anywhere. AC have compounded their problems here by banging up a "large investors keep out" sign thereby reducing any chance of inflows into the access accounts. So overall I do not see much chance of us ever moving back to a proper queue system - hence the current system which penalises large investors will continue for a lengthy period of time (maybe forever), meaning the effect becomes non-negligible. On the second point I'm sure people will still be complaining. The thing is, if they take what they have now and go back to a queue (which is what always was and what it was supposed to be) then all the investors currently getting bailed out will turn round and start asking "how come I am not getting bailed out of this anymore" - to which the answer is "you should never have got bailed out ahead of everyone else in the first place". I don't think we will ever get back to a queue though.
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Post by bracknellboy on Apr 12, 2020 5:18:48 GMT
while the purpose of the forum should be to allow and support a whole range of opinions and facilitate debate, isn't there a point where repetitive bleating on the same topic ad nauseam goes beyond simply boorish to being detrimental to the efficient functioning of the forum and in effect amount to trolling; and in the interests of others shouldn't those causing the problem be banned for at least some period for the benefit of others.
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bg
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Post by bg on Apr 12, 2020 8:07:52 GMT
1. the value of the underlying businesses and assets that our money is invested in and 2. the success of AC as a viable business So with respect to point 1, If projects fail due to the collapse of the funding pipeline the result is partially completed developments - maybe 25-50% of your money back. Point 2 is demonstrated by the huge hit that investors have taken (and are still taking) funding the wind-down costs in the multiple P2P business failures we have witnessed over the last year or so - a 50-75% return might be seen as a very good result in this scenario. Great post. Regarding your point 1 though, do you think 25-50% return on unfunded developments is realistic? My bigger concern is that legally there isn't even a claim on security, in fact it may be in the other direction. If a contract has been signed for £X to be provided over a time period and instead £0.3X has been supplied, can AC realistically say we aren't funding the rest and demand repayment? If the repayment isn't forthcoming can they then call in a receiver? I'm really not sure they can. Imagine a developer that has put in £1m of their own equity, signed an agreement for a £3m loan from AC, has received £1.5m of it from AC and built out half the site. If AC then says OK we are breaking this contract and you now need to sell the building site into a market like this, whats the legal position (I know from experience people are very reluctant to buy an incomplete building site as they effectively have to start everything again from scratch). I think the developer who is then looking at a certain wipe out of the £1m they have put in plus a lot of wasted effort is going to be pretty unhappy about this. Of course a lot depends on the nature of the agreement but it is the main worry for me.
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bg
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Post by bg on Apr 12, 2020 8:16:02 GMT
I have sympathy with your position but given the vast majority of repayments are currently being withheld by AC and they have stated they are intending to move back to a proper queue system then surely the numbers involved are really negligible for a larger investor? Also, when we do move back to a queue by withdrawal date, won't we have the same argument that those at the front of the queue are are being bailed out by those behind them despite everyone having a withdrawal request in? I think as it currently stands with the payments we have all received you are correct, its negligible. The issue here is the moving back to the proper queue system. If you look around the landscape at the moment its clear there is money exiting all platforms either sitting in queues or being offered at large discounts on secondary markets. These queues are not small and nor is AC's. The only way the queue will normalise is for the balance of demand and supply to come back into line and there is little sign of that happening anywhere. AC have compounded their problems here by banging up a "large investors keep out" sign thereby reducing any chance of inflows into the access accounts. So overall I do not see much chance of us ever moving back to a proper queue system - hence the current system which penalises large investors will continue for a lengthy period of time (maybe forever), meaning the effect becomes non-negligible. On the second point I'm sure people will still be complaining. The thing is, if they take what they have now and go back to a queue (which is what always was and what it was supposed to be) then all the investors currently getting bailed out will turn round and start asking "how come I am not getting bailed out of this anymore" - to which the answer is "you should never have got bailed out ahead of everyone else in the first place". I don't think we will ever get back to a queue though. On your first point, I don't see any real barrier on switching the queue system. If there is £X to pay out to investors then the length of the queue really shouldn't restrict the method they pay it out. Well I can't see why it would anyway, they could switch back quickly if they so desire. I also can't see how switching to a time stamped queue would suddenly mean larger investors would then decide to put large sums back into the access accounts. Completely agree on point two. There are a small minority of people who were happy to take the high interest rate but expect the risks to be shouldered by someone else. Whatever happens it will always be someone else's fault.
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dead-money
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Post by dead-money on Apr 12, 2020 8:57:44 GMT
"Imagine a developer that has put in £1m of their own equity, signed an agreement for a £3m loan from AC, has received £1.5m of it from AC and built out half the site. If AC then says OK we are breaking this contract and you now need to sell the building site into a market like this, whats the legal position (I know from experience people are very reluctant to buy an incomplete building site as they effectively have to start everything again from scratch). I think the developer who is then looking at a certain wipe out of the £1m they have put in plus a lot of wasted effort is going to be pretty unhappy about this. Of course a lot depends on the nature of the agreement but it is the main worry for me."
As outlined in Stuart's comunications, this shouldn't be an issue. For development loans the required capital and the interest due to AC is all set aside and retained within AC accounts. So as builds progress AC can fulfil drawdown requests and also allocate interest to lenders.
The two main issues with property developments will be slippage to the time lines due to contractor availability and then, once practical completion is achieved, whether properties can be marketed and sold quickly at the required price in a depressed market.
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bg
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Post by bg on Apr 12, 2020 9:21:02 GMT
"Imagine a developer that has put in £1m of their own equity, signed an agreement for a £3m loan from AC, has received £1.5m of it from AC and built out half the site. If AC then says OK we are breaking this contract and you now need to sell the building site into a market like this, whats the legal position (I know from experience people are very reluctant to buy an incomplete building site as they effectively have to start everything again from scratch). I think the developer who is then looking at a certain wipe out of the £1m they have put in plus a lot of wasted effort is going to be pretty unhappy about this. Of course a lot depends on the nature of the agreement but it is the main worry for me."
As outlined in Stuart's comunications, this shouldn't be an issue. For development loans the required capital and the interest due to AC is all set aside and retained within AC accounts. So as builds progress AC can fulfil drawdown requests and also allocate interest to lenders.
The two main issues with property developments will be slippage to the time lines due to contractor availability and then, once practical completion is achieved, whether properties can be marketed and sold quickly at the required price in a depressed market.
No it's not. If you think that is the case, why do you think they have to fund future tranches of development loans? It's why the majority of repayments/deposits into the Access accounts are being held back and not used to fulfill withdrawal requests.
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Mikeme
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Post by Mikeme on Apr 12, 2020 9:54:25 GMT
If as feared house prices fall and the market is slow we need to help the developers to complete the projects. That also means there must be something in it for them. If a developer thinks he'll get nothing and walks away our capital is at greater risk as been explained earlier.
There may for example be developments more suitable for renting at this time and we become co owners until the market returns. I don't know how this might work but am sure our loss would be lower.
Just an example so don't just shout me down. The whole country is going to have to be flexible.
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tjtl
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Post by tjtl on Apr 12, 2020 10:37:44 GMT
If as feared house prices fall and the market is slow we need to help the developers to complete the projects. That also means there must be something in it for them. If a developer thinks he'll get nothing and walks away our capital is at greater risk as been explained earlier. There may for example be developments more suitable for renting at this time and we become co owners until the market returns. I don't know how this might work but am sure our loss would be lower. Just an example so don't just shout me down. The whole country is going to have to be flexible. Agree entirely on the need to be flexible. In simple terms this virus has, inevitably, hurt growth prospects, reduced asset values, and made most of us, and most companies, somewhat poorer. You don't have to agree entirely with Kenneth Rogoff from Harvard, or Larry Summers, to be fearful of an impending sharp economic slowdown. It is naive to expect the companies AC has lent our money to to be able to escape with minimal cost , and doubly so if we tie their hands with the same strictures that applied before the virus hit- we are in a different economic world and , bluntly, different circumstances require different rules. I am all for AC keeping a strong eye on the investments made, and taking action where companies try and use Covid as an excuse for other issues, but I am also absolutely in favour of giving the management a lot of leeway to enable as many of the investee companies to survive, and indeed prosper. This won't be a sharp "V shaped recovery" - the damage is too deep, but there is every reason to hope that the damage (to the economy, and to the companies lent to) can be minimised if sufficient common sense is applied. This will require flexibility and creativity- business models will change. Patience and forbearance will be required from all of us if we are to see a decent return on our investments to date.
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Post by Harland Kearney on Apr 12, 2020 11:28:52 GMT
If as feared house prices fall and the market is slow we need to help the developers to complete the projects. That also means there must be something in it for them. If a developer thinks he'll get nothing and walks away our capital is at greater risk as been explained earlier. There may for example be developments more suitable for renting at this time and we become co owners until the market returns. I don't know how this might work but am sure our loss would be lower. Just an example so don't just shout me down. The whole country is going to have to be flexible. Agree entirely on the need to be flexible. In simple terms this virus has, inevitably, hurt growth prospects, reduced asset values, and made most of us, and most companies, somewhat poorer. You don't have to agree entirely with Kenneth Rogoff from Harvard, or Larry Summers, to be fearful of an impending sharp economic slowdown. It is naive to expect the companies AC has lent our money to to be able to escape with minimal cost , and doubly so if we tie their hands with the same strictures that applied before the virus hit- we are in a different economic world and , bluntly, different circumstances require different rules. I am all for AC keeping a strong eye on the investments made, and taking action where companies try and use Covid as an excuse for other issues, but I am also absolutely in favour of giving the management a lot of leeway to enable as many of the investee companies to survive, and indeed prosper. This won't be a sharp "V shaped recovery" - the damage is too deep, but there is every reason to hope that the damage (to the economy, and to the companies lent to) can be minimised if sufficient common sense is applied. This will require flexibility and creativity- business models will change. Patience and forbearance will be required from all of us if we are to see a decent return on our investments to date. Entirely true, judging from all these "polls" and the AC vote. A vast majority of lenders agree with this qoute above. It is only a few who bought investments, thinking they'd be able to get back cash quickly if they needed to sell out who are rejecting this narriative. Why I don't know, I'm sure they reply with paragraphs of why its AC's fault anyway. But even in a Queue system, I don't think it would of moved very far at all yet. If I were in that postion I'd be panicing too. Its becoming close to denial from some posters on this board. I'm not looking forward to losses, but who is. I'm not special or diffrent unless I was holding in a bank and wasnt' exceeding 85k per bank then I'd be fine. If I'm going to lose money, thats my fault as I made the investment. That's how it is, sucks. Eitherway, most investment classes are taking losses, or liquidity issues. I have been picking up shares at super low prices, but that is no gurrantee I wont' catch falling daggers in that excersise. Everything is calculated risk, diversifcation is key. The poll results on this very thread show us that viewers, even those not posting are sick of the spam. Stop it or the board will die, please.
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agent69
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Post by agent69 on Apr 12, 2020 12:26:02 GMT
Entirely true, judging from all these "polls" and the AC vote. A vast majority of lenders agree with this qoute above. It is only a few who bought investments, thinking they'd be able to get back cash quickly if they needed to sell out who are rejecting this narriative. Why I don't know, I'm sure they reply with paragraphs of why its AC's fault anyway. But even in a Queue system, I don't think it would of moved very far at all yet. If I were in that postion I'd be panicing too. Its becoming close to denial from some posters on this board. I'm not looking forward to losses, but who is. I'm not special or diffrent unless I was holding in a bank and wasnt' exceeding 85k per bank then I'd be fine. If I'm going to lose money, thats my fault as I made the investment. That's how it is, sucks. Eitherway, most investment classes are taking losses, or liquidity issues. I have been picking up shares at super low prices, but that is no gurrantee I wont' catch falling daggers in that excersise. Everything is calculated risk, diversifcation is key. The poll results on this very thread show us that viewers, even those not posting are sick of the spam. Stop it or the board will die, please. Once again you are offering up personal opinion as fact (do you have any evidence to support your views?).
Common sense suggests that people who put money in the QAA did so because they thought they woud be able to get their cash back quickly. If they didn't believe this to be the case then they would have put it in the 30 / 90 day accounts, which pay a higher rate of interest.
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happy
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Post by happy on Apr 12, 2020 14:18:10 GMT
1. the value of the underlying businesses and assets that our money is invested in and 2. the success of AC as a viable business So with respect to point 1, If projects fail due to the collapse of the funding pipeline the result is partially completed developments - maybe 25-50% of your money back. Point 2 is demonstrated by the huge hit that investors have taken (and are still taking) funding the wind-down costs in the multiple P2P business failures we have witnessed over the last year or so - a 50-75% return might be seen as a very good result in this scenario. Great post. Regarding your point 1 though, do you think 25-50% return on unfunded developments is realistic? My bigger concern is that legally there isn't even a claim on security, in fact it may be in the other direction. If a contract has been signed for £X to be provided over a time period and instead £0.3X has been supplied, can AC realistically say we aren't funding the rest and demand repayment? If the repayment isn't forthcoming can they then call in a receiver? I'm really not sure they can. Imagine a developer that has put in £1m of their own equity, signed an agreement for a £3m loan from AC, has received £1.5m of it from AC and built out half the site. If AC then says OK we are breaking this contract and you now need to sell the building site into a market like this, whats the legal position (I know from experience people are very reluctant to buy an incomplete building site as they effectively have to start everything again from scratch). I think the developer who is then looking at a certain wipe out of the £1m they have put in plus a lot of wasted effort is going to be pretty unhappy about this. Of course a lot depends on the nature of the agreement but it is the main worry for me. Thanks bg. For a partially built development it may well be the case that the resales value may even be below that of the undeveloped land as new developers may not want to deal with taking over something that may not be what they would want to build or may not be built to regulations etc and they could factor the cost of demolition/ site clearance etc into their offers. It could also depend on the state that the development is handed over in. If the developer has gone to the wall it could be an unknown entity for the new owner outside of any documented site visits by local Planning Control Officers. Regarding the legalities of AC breaking their contract through failing to fund subsequent draw-downs that would in the first instance depend on the contract between the two parties however it is not inconceivable that AC may be able to use force majeure in their defence to protect their interest in the security. It would make an interesting legal case however.
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Mikeme
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Post by Mikeme on Apr 12, 2020 14:32:40 GMT
The best way forward is as much as possible leave lawyers out of it! Let AC work through with borrowers and lenders alike. That is my view and judging from the majority posting and the result of the forbearance vote.
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Post by investor01010101 on Apr 18, 2020 11:08:10 GMT
This problem has been caused by AC - I am an investor that invested in the access account on the basis that I would be able to access my cash in a reasonable time frame. It feels I have been mis-sold a product, is this the PPI crisis again? I presume you too were obliged to complete AC’s lender appropriateness test a few months back? If so, you already confirmed your full appreciation of the risks that you might NOT be able to access your cash in a “reasonable time frame” if normal market conditions ended. So why all the faux shock and outrage now? You’re making this forum unreadable for others and making yourself look a fool. You mean the one where you couldn't access the site if you you disagreed?
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ilmoro
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Post by ilmoro on Apr 18, 2020 11:22:50 GMT
I presume you too were obliged to complete AC’s lender appropriateness test a few months back? If so, you already confirmed your full appreciation of the risks that you might NOT be able to access your cash in a “reasonable time frame” if normal market conditions ended. So why all the faux shock and outrage now? You’re making this forum unreadable for others and making yourself look a fool. You mean the one where you couldn't access the site if you you disagreed? No, the mandatory FCA one where you couldn't lend more money if you didn't complete it but had full access to the site and could withdraw money without problem.
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