alender
Member of DD Central
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Post by alender on Jun 24, 2020 18:06:45 GMT
Good news for people waiting for large AA discounts so they can prey on the misery of others.
I think you will find it is more than just a few who are stuck in AAs against their wishes and suffering from the reduction in interest rates. It's called capitalism, if you don't like it then you could always try starving in North Korea. AA holders are free to decide any discount so if you don't want to lose money then it's a risk you are fully entitled to take. I once bought a cheap car at an auction, it turned out to be a complete turd but I didn't complain or bleat that others must immediately help me out at great cost. No, I took a punt and lost, better luck next time. AC needs to be seen to be doing the right thing, that is a clearly articulated plan to have the AA SM up and running before MLA lending restarts. That's all. I don't think capitalism is locking people into accounts, using there capital repayments to fund future loan tranches while not telling investors how much they would be liable for when they invested, decreasing interest rates, changing the nature of the accounts by creating a secondary market when investors were not informed that it was even a possibility and now taking on new loans when there is a liquidity crisis.
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Post by elf on Jun 24, 2020 18:29:31 GMT
The loans with tranches are mainly development loans which all appear to have a higher rate of interest and so are invested in by both MLA and AA; presumably there is institutional money in some of them too. Unfortunately the terms of reference of the AAs allow Assetz to withhold capital repayments in case other sources of funding cannot be found for the future tranches. So basically access account holders have to carry the can to service the other categories of investor. Its actually quite a common thing I've noticed in investments that a strategy/scheme that is lower-than-average risk under normal market conditions actually switches to becoming a worst-than-average outcome when things go bad. So access was the apparently lower risk option but MLA is now better since each loan can either be sold at discount or you can wait to redemption whereas "Access" currently has neither option and selling-at-discount is presumably the only future possibility. The development loans in the MLA already have huge amounts for sale, some at a discount so transferring any AA holding of those loans at par will not sell a penny. I fail to see why AA holders don't have the option of waiting for redemption, are you suggesting that all the loans are bad and all the collateral is worthless? The MLA (which gives a truer picture of actual asset value) certainly doesn't reflect that, most discounts are in the 0-2% range so its nearly bottomed out at par. After the initial frenzy on the AA SM I expect the AAs to be similar or closer to par as they are lower risk than the same loan in the MLA. I agree that AA investors are having a rough ride but it was obvious there was no emergency exit and it was a horrible black box inside of which only AC knows the risks. I suspect that all P2P platforms are choosing to hurt the investors that are easiest to replace, from a purely pragmatic point of view it's the only sensible thing to do as the least worst option for them. I'm still completely confident that in a few months the Access Accounts will be flooded with money from investors fascinated by this new and exciting P2P thingy and the whole merry go round starts again. I hope I'm wrong as the AAs have been forcing MLA rates down for years and I would like nothing better than to see the AAs gone forever but I'm not that naive. honda You ask why AA holders don't have the option of waiting for redemption. Do you know whether Assetz will release that money. If you accept they're withholding some for the existing loan tranches the rest of the redemptions should be building up a liquidity fund for par exit - that will be taking a lot of cash out of Assetz's domain. Instead if they argue the SM provides liquidity to investors they could then return to using redemptions for entirely new loans. The AA accounts never reduce because the SM only swaps loan packages and cash between one investor and another. My suspicion comes because Assetz appear to be focussed on growing the institutional side of the business (which makes good sense) and floating on the market. So my concern is that they will simply try and lock in the £200million in the AAs via using the secondary market cash-for-loan swaps as the only way for investors to exit (whether or not there is any money being made available in this market or if only at enormous discounts). They don't need to worry about the private investors being unhappy because they'll be less important in future (and as you say there will always be a new crop of people who will "discover" p2p and ignore the risks as many of us have done recently). I'm only outlining a scenario and my unease may be entirely wrong about what they're up to - the future makes fools of all of us. But this thread started with Stuart clarifying new retail loans would be restarting in MLA not AA but the article he linked to mentions AAs restarting such loans when liquidity has returned to them which could possibly mean SM up and running. I think there's a good chance black box access accounts will indeed disappear, as you hope, from the p2p world as they have no place pretending to be something they're really not. This will probably come from the platforms themselves rather than the FCA who are always about as useful as an ashtray on a motorbike.
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Post by honda2ner on Jun 24, 2020 19:50:58 GMT
It's called capitalism, if you don't like it then you could always try starving in North Korea. AA holders are free to decide any discount so if you don't want to lose money then it's a risk you are fully entitled to take. I once bought a cheap car at an auction, it turned out to be a complete turd but I didn't complain or bleat that others must immediately help me out at great cost. No, I took a punt and lost, better luck next time. AC needs to be seen to be doing the right thing, that is a clearly articulated plan to have the AA SM up and running before MLA lending restarts. That's all. I don't think capitalism is locking people into accounts, using there capital repayments to fund future loan tranches while not telling investors how much they would be liable for when they invested, decreasing interest rates, changing the nature of the accounts by creating a secondary market when investors were not informed that it was even a possibility and now taking on new loans when there is a liquidity crisis. I agree it isn't a pretty list but what's the alternative? If the platform fails then all that lot looks like a tea party on a sunny warm evening. Let's see if AC can dig themselves out before chucking bricks at their head, they will hopefully get the AA SM up and running before new loans happen. Whatever happens the platform must survive no matter how distastefully it is done and if that means restarting lending then we just need to buckle up and hold tight. Not defending AC here, like almost all the other P2P firms their PR is either sickly sweet whitewash or silence, don't know why as surely what most people want is the hard truth put bluntly.
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alender
Member of DD Central
Posts: 981
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Post by alender on Jun 24, 2020 21:18:51 GMT
I don't think capitalism is locking people into accounts, using there capital repayments to fund future loan tranches while not telling investors how much they would be liable for when they invested, decreasing interest rates, changing the nature of the accounts by creating a secondary market when investors were not informed that it was even a possibility and now taking on new loans when there is a liquidity crisis. I agree it isn't a pretty list but what's the alternative? If the platform fails then all that lot looks like a tea party on a sunny warm evening. Let's see if AC can dig themselves out before chucking bricks at their head, they will hopefully get the AA SM up and running before new loans happen. Whatever happens the platform must survive no matter how distastefully it is done and if that means restarting lending then we just need to buckle up and hold tight. Not defending AC here, like almost all the other P2P firms their PR is either sickly sweet whitewash or silence, don't know why as surely what most people want is the hard truth put bluntly. I agree I do not want to see AC collapse but I an very concerned it is showing scant regard for AA holders, it has trapped them in and thinks it can do what it likes. I do not agree with the AA SM as it adds no liquidity to AAs and makes it unlikely any new money will enter the AAs for quite some time if at all. The new MLA loans look to be on better terms and can only add competition for new funds so will add to the AA SM discounts. It does not matter if this happens at a later date as people will hold fire to get the best deal.
I accept there is a liquidity crisis but when I invested in the AAs in the event of a crisis I was expecting interest and repaid capital to be returned and in time if all went well new money would enter the AAs. I had no idea or was given any indication that AC would make all these changes, it is not what I signed up for.
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Post by crabbyoldgit on Jun 25, 2020 7:05:15 GMT
During the present crisis i have had all my 95% mlia investments set to withdraw and let the returned funs sit in the cash account. At present about 25% of my total funds ,accepting a kind of cash drag for reduced risk and access.
Now with new mlia loans coming up i may start returning these funds into the new loans but with the unknown risks and property sell vaules unshure yet, will need lower ltv values and maybe a increase in interest . Will watch the new loans with interest.
However in my road several houses for sell have shifted in the last couple of weeks and prices have not appeared to have crashed in any way , maybe 5% max, thats south dorset mind and there are stories of a se england exodus of the retired in this direction due the viris, why i have no idea.
Anybody else think this way and what ltv / interest rates would bring people back in.
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dave4
Member of DD Central
Cynical is a hobby not a lifestyle
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Post by dave4 on Jun 25, 2020 7:40:31 GMT
During the present crisis i have had all my 95% mlia investments set to withdraw and let the returned funs sit in the cash account. At present about 25% of my total funds ,accepting a kind of cash drag for reduced risk and access. Now with new mlia loans coming up i may start returning these funds into the new loans but with the unknown risks and property sell vaules unshure yet, will need lower ltv values and maybe a increase in interest . Will watch the new loans with interest. However in my road several houses for sell have shifted in the last couple of weeks and prices have not appeared to have crashed in any way , maybe 5% max, thats south dorset mind and there are stories of a se england exodus of the retired in this direction due the viris, why i have no idea. Anybody else think this way and what ltv / interest rates would bring people back in. I see the new world of p2p to be more lender risk for less reward and bigger platform fees. Just for the simple reason the banks offer so lo interest to savers and money is so cheap to borrow from the banks.
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ashtondav
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Post by ashtondav on Jun 25, 2020 7:43:24 GMT
I agree it isn't a pretty list but what's the alternative? If the platform fails then all that lot looks like a tea party on a sunny warm evening. Let's see if AC can dig themselves out before chucking bricks at their head, they will hopefully get the AA SM up and running before new loans happen. Whatever happens the platform must survive no matter how distastefully it is done and if that means restarting lending then we just need to buckle up and hold tight. Not defending AC here, like almost all the other P2P firms their PR is either sickly sweet whitewash or silence, don't know why as surely what most people want is the hard truth put bluntly. I agree I do not want to see AC collapse but I an very concerned it is showing scant regard for AA holders, it has trapped them in and thinks it can do what it likes. I do not agree with the AA SM as it adds no liquidity to AAs and makes it unlikely any new money will enter the AAs for quite some time if at all. The new MLA loans look to be on better terms and can only add competition for new funds so will add to the AA SM discounts. It does not matter if this happens at a later date as people will hold fire to get the best deal.
I accept there is a liquidity crisis but when I invested in the AAs in the event of a crisis I was expecting interest and repaid capital to be returned and in time if all went well new money would enter the AAs. I had no idea or was given any indication that AC would make all these changes, it is not what I signed up for.
P2p was, is and always will be, an illiquid investment unless there is a willing buyer of your loans. End of. The marketing may have implied otherwise but the T&C were crystal clear. p2p is no different to private equity, unquoted stocks (see Woodford), or property funds where again you cannot exit if there is a demand/supply shock. p2p is ILLIQUID. If you wanted access, guaranteed access, you should have visited the nationwide. You didn’t, you invested in loans. And if few others wish to buy them you are stuck in them until they repay. The bleating on this forum is ridiculous.
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dead-money
Rocket to the Moon
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Post by dead-money on Jun 25, 2020 8:12:09 GMT
I agree it isn't a pretty list but what's the alternative? If the platform fails then all that lot looks like a tea party on a sunny warm evening. Let's see if AC can dig themselves out before chucking bricks at their head, they will hopefully get the AA SM up and running before new loans happen. Whatever happens the platform must survive no matter how distastefully it is done and if that means restarting lending then we just need to buckle up and hold tight. Not defending AC here, like almost all the other P2P firms their PR is either sickly sweet whitewash or silence, don't know why as surely what most people want is the hard truth put bluntly. I agree I do not want to see AC collapse but I an very concerned it is showing scant regard for AA holders, it has trapped them in and thinks it can do what it likes.
I do not agree with the AA SM as it adds no liquidity to AAs and makes it unlikely any new money will enter the AAs for quite some time if at all. The new MLA loans look to be on better terms and can only add competition for new funds so will add to the AA SM discounts. It does not matter if this happens at a later date as people will hold fire to get the best deal.
I accept there is a liquidity crisis but when I invested in the AAs in the event of a crisis I was expecting interest and repaid capital to be returned and in time if all went well new money would enter the AAs. I had no idea or was given any indication that AC would make all these changes, it is not what I signed up for.
My definition, a secondary market will add liquidity and it will bring in new money to the access accounts. That's it's whole raisin d'etre.
I can't use my existing access account holdings or MLA holdings to buy discounted AA units, it's got to be cash. Whether that cash was already sat within the platform uninvested or is transferred in prior to purchase makes no difference, it will still be new money to the AA accounts and it will release holdings from those looking to exit.
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alender
Member of DD Central
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Post by alender on Jun 25, 2020 8:25:20 GMT
I agree I do not want to see AC collapse but I an very concerned it is showing scant regard for AA holders, it has trapped them in and thinks it can do what it likes. I do not agree with the AA SM as it adds no liquidity to AAs and makes it unlikely any new money will enter the AAs for quite some time if at all. The new MLA loans look to be on better terms and can only add competition for new funds so will add to the AA SM discounts. It does not matter if this happens at a later date as people will hold fire to get the best deal.
I accept there is a liquidity crisis but when I invested in the AAs in the event of a crisis I was expecting interest and repaid capital to be returned and in time if all went well new money would enter the AAs. I had no idea or was given any indication that AC would make all these changes, it is not what I signed up for.
P2p was, is and always will be, an illiquid investment unless there is a willing buyer of your loans. End of. The marketing may have implied otherwise but the T&C were crystal clear. p2p is no different to private equity, unquoted stocks (see Woodford), or property funds where again you cannot exit if there is a demand/supply shock. p2p is ILLIQUID. If you wanted access, guaranteed access, you should have visited the nationwide. You didn’t, you invested in loans. And if few others wish to buy them you are stuck in them until they repay. The bleating on this forum is ridiculous. If "P2p was, is and always will be, an illiquid investment" then AC should not have advertised it differently and not stated there was never any problems with getting money out and could not see any problems in the future. It would be good if people stopped making straw man arguments to put down people with different views and try to silence them with statements like "The bleating on this forum is ridiculous".
However that is not the issue, it is that AC have completely changed the AAs since the lock down and if we disagree it makes no difference as they have locked us in and do not care about us, it is fast becoming a defunct product and AC will now look for business in new areas and leave the AA holder out to dry as I predicted months ago. Great British Business Account & Green Energy Account are examples of what AC do.
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alender
Member of DD Central
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Post by alender on Jun 25, 2020 8:27:38 GMT
I agree I do not want to see AC collapse but I an very concerned it is showing scant regard for AA holders, it has trapped them in and thinks it can do what it likes.
I do not agree with the AA SM as it adds no liquidity to AAs and makes it unlikely any new money will enter the AAs for quite some time if at all. The new MLA loans look to be on better terms and can only add competition for new funds so will add to the AA SM discounts. It does not matter if this happens at a later date as people will hold fire to get the best deal.
I accept there is a liquidity crisis but when I invested in the AAs in the event of a crisis I was expecting interest and repaid capital to be returned and in time if all went well new money would enter the AAs. I had no idea or was given any indication that AC would make all these changes, it is not what I signed up for.
My definition, a secondary market will add liquidity and it will bring in new money to the access accounts. That's it's whole raisin d'etre.
I can't use my existing access account holdings or MLA holdings to buy discounted AA units, it's got to be cash. Whether that cash was already sat within the platform uninvested or is transferred in prior to purchase makes no difference, it will still be new money to the AA accounts and it will release holdings from those looking to exit.
The SM will not bring in money into the AAs, no new money will enter these accounts via that route, it is more likely to prevent new money into these accounts as why would anyone wish to invest directly in the AAs when they can buy in at a discount.
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cb25
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Post by cb25 on Jun 25, 2020 8:54:42 GMT
My definition, a secondary market will add liquidity and it will bring in new money to the access accounts. That's it's whole raisin d'etre.
I can't use my existing access account holdings or MLA holdings to buy discounted AA units, it's got to be cash. Whether that cash was already sat within the platform uninvested or is transferred in prior to purchase makes no difference, it will still be new money to the AA accounts and it will release holdings from those looking to exit.
The SM will not bring in money into the AAs, no new money will enter these accounts via that route, it is more likely to prevent new money into these accounts as why would anyone wish to invest directly in the AAs when they can buy in at a discount. I agree that in the short term at least a SM is unlikely to bring new money into the AAs. However if a SM allows those wishing to exit the AAs (probably at a discount) to do so - and exit the platform as well if they wish - why would they care if the net funds in the AAs stays level, increases or decreases? I doubt they will. Rather they'll think "I've got my money out, that's the end of my interest in AC".
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Post by stuartassetzcapital on Jun 25, 2020 9:43:54 GMT
P2p was, is and always will be, an illiquid investment unless there is a willing buyer of your loans. End of. The marketing may have implied otherwise but the T&C were crystal clear. p2p is no different to private equity, unquoted stocks (see Woodford), or property funds where again you cannot exit if there is a demand/supply shock. p2p is ILLIQUID. If you wanted access, guaranteed access, you should have visited the nationwide. You didn’t, you invested in loans. And if few others wish to buy them you are stuck in them until they repay. The bleating on this forum is ridiculous. If "P2p was, is and always will be, an illiquid investment" then AC should not have advertised it differently and not stated there was never any problems with getting money out and could not see any problems in the future. It would be good if people stopped making straw man arguments to put down people with different views and try to silence them with statements like "The bleating on this forum is ridiculous".
However that is not the issue, it is that AC have completely changed the AAs since the lock down and if we disagree it makes no difference as they have locked us in and do not care about us, it is fast becoming a defunct product and AC will now look for business in new areas and leave the AA holder out to dry as I predicted months ago. Great British Business Account & Green Energy Account are examples of what AC do.
Quite astounding claims and they cannot be left to mislead others. What you state is the opposite of our website risk warnings. The AA workings are directly affected by the investors' behavior, quite simply more investors wanting withdrawals than deposits for a period and that was always clearly stated and understood. This is investor behavior due to the situation, not AC changes. This behavior is, however, not surprising given the shock everyone got a few months ago but it is now diminishing again. We are not a bank account, you are invested in illiquid loans and always have been and need to hold to term unless there is enough buyer demand to buy off you early, which there always has been till March and will be again in the future we trust. We will continue to seek to create new solutions to a very difficult global problem and will not leave our AA investors to the mercy of the current situation, fail to make improvements and just move off to other things as you suggest. We could easily make decisions that just put the AAs into a 5 year run off or so and move on. It is far harder and painful and costly to do the right thing and that is what we are doing.
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Post by davee39 on Jun 25, 2020 9:46:42 GMT
How can anyone realistically value an AA holding?
My account currently has 6.2% cash
7.9% default
11.0 % suspended (including defaults)
a further 20.6% subjected to monitoring events
The defaults have a degree of protection from 'ring fencing' and the mythical provision fund, my understanding is that the protection is based on expected final losses, rather than the total defaulted balance.
While the monitoring events may be a result of forbearance, a proportion will inevitably default.
Add in further uncertainties about LTV's in highly distressed markets where commercial property has been significantly devalued.
The lack of transparancy regarding provision fund cover, and the failure of the provision fund to ever actually pay out makes this more of a lottery than a market.
AA discounts cannot be compared with MLA discounts. The MLA discounts only apply to tradeable loans, which can be subjected to a degree of rational analysis, the AA discounts will include the junk.
Without transparancy regarding the protection in place on a tranferred portfolio, both buyers and sellers could have a valid mis-selling complaint.
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Post by stuartassetzcapital on Jun 25, 2020 9:55:47 GMT
All of these might be valid worries before last year but they are all now covered by the regulatory requirements on how provision funds are managed and communicated. If the PF states that it covers known risks of loss then that is true. No future PF income is allowed for in that calculation, just cash holdings in the PF. if there are any known issues with loans that might lead to a loss then that is ringfenced immediately as cash in order to permit continued trading.
If the PF did not have enough cash for this then various outcomes may then happen including freezing the accounts to all trading, extracting those new problem loans that didn't have 100% PF coverage for their expected losses etc. That could happen or it might not. Adjustments to interest rates are now creating a substantial PF top up in cash for the AAs. Future income still looks strong. defaults have been very low recently, albeit partly due to forbearance. All loans are secured. Also, to say the PF never pays out is incorrect, it has and it will.
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ian
Posts: 342
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Post by ian on Jun 25, 2020 9:56:17 GMT
If "P2p was, is and always will be, an illiquid investment" then AC should not have advertised it differently and not stated there was never any problems with getting money out and could not see any problems in the future. It would be good if people stopped making straw man arguments to put down people with different views and try to silence them with statements like "The bleating on this forum is ridiculous".
However that is not the issue, it is that AC have completely changed the AAs since the lock down and if we disagree it makes no difference as they have locked us in and do not care about us, it is fast becoming a defunct product and AC will now look for business in new areas and leave the AA holder out to dry as I predicted months ago. Great British Business Account & Green Energy Account are examples of what AC do.
Quite astounding claims and they cannot be left to mislead others. What you state is the opposite of our website risk warnings. The AA workings are directly affected by the investors' behavior, quite simply more investors wanting withdrawals than deposits for a period and that was always clearly stated and understood. This is investor behavior due to the situation, not AC changes. This behavior is, however, not surprising given the shock everyone got a few months ago but it is now diminishing again. We are not a bank account, you are invested in illiquid loans and always have been and need to hold to term unless there is enough buyer demand to buy off you early, which there always has been till March and will be again in the future we trust. We will continue to seek to create new solutions to a very difficult global problem and will not leave our AA investors to the mercy of the current situation, fail to make improvements and just move off to other things as you suggest. We could easily make decisions that just put the AAs into a 5 year run off or so and move on. It is far harder and painful and costly to do the right thing and that is what we are doing. Whilst lenders recognise the impact of a lack of inflows on liquidity, investors did not sign up to a commitment to fund never ending tranches of investment which are lent against increasingly spurious GDVs. All we ask is redeemed funds are directed to the cash account. If AC needs to bolster capital reserves possibly they should launch a 365 day access account, offering say 8% in order to equitably address the issue of capital flight.
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