Mikeme
Member of DD Central
Posts: 428 
Likes: 331
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Post by Mikeme on Jun 26, 2020 16:02:28 GMT
We all invested here via AC but many like me are not professional inverters like the majority of posters here seem to be. I was looking for a way of beating the banks interest rates and am still content.
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Post by crabbyoldgit on Jun 26, 2020 17:56:30 GMT
If anybody out there is going to sell their aa account at 90% discount , as suggested in a previous post, please pm me . I may oblige, it sounds a fine idea but only if you sell to me.
Seriously the market in the mlia has settled to a market discount of arround 2% , the aa accounts are not in my opinion as good a product so my guess the discount rate will settle after the first rush of the pannicked and those who for various reasons have to have cash right now to between 3 and 5% A hit for sure but not a disaster if you take into account past returns greater than bank offerings.
Sometimes wonder if people are talking up big discount losses so as to make a quick buck when the AA sm opens.
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alender
Member of DD Central
Posts: 981
Likes: 683
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Post by alender on Jun 26, 2020 18:08:07 GMT
The problem you fail to understand is that as I have explained it now makes sense not to request with withdrawals on all of your your funds and if you wish to stay buy back in at a discount, the more money in the withdraw queue the less repaid to those wishing to leave, did not AC state that only 25% of money was requested for withdrawal, now watch this rise. If the withdraw queue rises it is detrimental to existing AA holders who wish to leave and do not want to take a haircut on the SM. Why would the exit queue rise? If there is £1000 in the queue and I buy £10 of it and then flip it at par the queue is errrrrm, £1000. I'm at the back of it, boo hoo. Even if existing AA holders sell out in order to buy back in at discount this speeds up the queue by exactly the same amount so the effect on everyone else in the queue is nothing. In other words if the queue doubles to £2000 because existing investors decide to sell, buy and flip, when £1000 from investors buy back in, the queue is errrrm, £1000. Only completely insane investors would increase discounts in this situation. It is not about the discounts, it is about those trying to get their money out via the withdraw system as was stated would happen in the event of a liquidity event in the T&Cs.
It is so simple, to maximise returns on a discounted market where you wish to stay (75% from AC) that has withdrawal pool at par you maximise your returns by getting as much out at par as you can, you buy back in at a discount getting better interest rate and greater capital than if you had not withdrawn and reinvested, this will encourage a lot more people to request withdrawals. I believe AC quoted 25% and if every investors does this (and why not as you end up with greater returns) then the amount of money for withdrawals will reduce to 1/4 of current amount, of course not everyone can understand this so it will be less than 75% but I believe most people have the intelligence to figure this out as a way to increase returns. I gave an example earlier, you will need to understand it is about investors who want to stay in the AAs wishing to maximise their returns with no extra risk will increases the size of the withdraw pot, more investors with more money waiting to withdraw, same amount of money for withdraw, each gets less.
Or to put it another way it is a problem where there is some money coming out at par only by request during the life of the product that is discounted, common sense dictates you take as mush out at par as possible and if you wish to stay buy back in at a discount. To the best of my knowledge there are no financial products which do this for this obvious reason.
This does not take into account that if there are some people with confidence in AC who wish to invest in the AAs in the current system this will increase the AA pot and amount available for withdraw by current investors, in the discounted system no new money will enter the AAs, just a churn of existing money.
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Post by honda2ner on Jun 26, 2020 19:32:30 GMT
OK. Whatever.
I'm giving up now. Let's see what happens shall we?
Personally I'm confident about what is going to happen and will, quite literally, put my money where my mouth is.
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daveb
Member of DD Central
Posts: 253
Likes: 210
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Post by daveb on Jun 26, 2020 20:25:58 GMT
"It is so simple, to maximise returns on a discounted market where you wish to stay (75% from AC) that has withdrawal pool at par you maximise your returns by getting as much out at par as you can, you buy back in at a discount getting better interest rate and greater capital than if you had not withdrawn and reinvested, this will encourage a lot more people to request withdrawals."
Look mate, if it's that flipping easy to get out at par THERE WON'T BE A PROBLEM WILL THERE?
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Post by Ton ⓉⓞⓃ on Jun 26, 2020 21:40:41 GMT
I think you're making some good points, alender, and a lot of what your saying is true... but | Date | £m QAA
30DAA
90DAA
Total
MLA
| 1.4.20
| £63
£75
£75
T213
MLA120
| 1.5.20
| 63
76
76
T215
MLA118
| 1.6.20
| 63
76
78
T217
MLA114
| 2
| d
| 3
| d
| 4
| d
| 5
| d
| 6
| d
| 7
| d
| 8
| d
| 9
| d
| 10
| d
| 11
| d
| 12
| d
| 13
| d
| 14
| d
| 15
| 63
76
79
T218
MLA114
| 16
| 63
76
79
T218
MLA115
| 17
| d
| 18
| d
| 19
| d
| 20
| d
| 21
| d
| 22
| d
| 23
| d
| 24
| d
| 25
| d
| Date
| £m
QAA/30DAA
/90DAA/Total
MLA
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d=ditto.
The table above seems to show new money is and has been coming in for a while into the AA a/c's. (A few millions of pounds)
Also when an MLA purchase is made, I believe, it can be bought from the AA if their isn't anyone else selling from their MLA, again more new money. In fact in normal times there's more linkage between the MLA and AA than we've seen recently, so when the MLA gets back to more or normal fluidity it should help with the AA's liquidity.
I think I just said this elsewhere that AC received £15mm of Government money for lending with conditions a couple of months back.
Don't forget there's substantial room for "excess money" to sit in the AA's which doesn't actually hold loan units and still receives interest. And that is where I hope we'll get back to. I don't think we're looking at a run-down or just sitting static with money pretty much stuck in AA's - your scenario's seem to take that as a given. I think the 75%, you mention, haven't thought about it, are too busy with other things and won't be taking part... anyway let see what happens.
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Post by nooneere on Jun 26, 2020 22:56:37 GMT
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ceejay
Posts: 975
Likes: 1,149
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Post by ceejay on Jun 27, 2020 8:27:01 GMT
AC's blog states "Currently, as funds become available for withdrawal from the Access Account, these are allocated to an investor’s withdrawal request on a pro-rata basis directly related to each investor’s total investment in that loan within the relevant AA that they are withdrawing from, not the size of their withdrawal request", meaning the amount in the withdrawal queue isn't currently the key to repayments. Have AC said that will change with the introduction of the SM? You are correct, I forgot about this feature but it makes no difference, buying on the SM will have this new amount added to the amount that can be withdrawn so once withdrawn can be recycled for extra interest and increased withdraw amounts (next time round) as explained, each time you do this you will increase your % of the AAs. The point is that why would anyone who wishes to stay not keep doing this as it will increase your returns to the detriment of current holders who wish to withdraw funds. The analogy to shares or trusts does not hold because of the withdraw at par function. Dare I hope that some light is slowly beginning to appear over this thread which has been so consumed with unproductive heat? It would appear to the be case that when the SM starts, all existing withdrawal requests become queued offers to sell at par. If you have such a request, then you will get a share of any redemption capital (proportional to your holding, not your sell request). We've seen over the last few weeks that these are best described as a steady dribble. It would be rational, if you wanted to stay in, to put in a modest withdrawal request and use any released funds to buy back in at whatever discount was on offer [possibly using a second account in case the UI doesn't allow you to buy and sell at the same time]. And, yes, if everyone does that then the redemption capital will be spread more thinly and anyone who is insisting on getting no less than 100% back and who is also insisting on wanting it back now is going to be disappointed. Which takes us back full circle - anyone who thought that they could have returns greater than FSCS rates while having a guaranteed immediate 100% exit option was ... mistaken. If you absolutely must have your money out now then you will be able to - but the return will be at its current market value which might be less than 100%.
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Post by Ace on Jun 27, 2020 8:41:16 GMT
You are correct, I forgot about this feature but it makes no difference, buying on the SM will have this new amount added to the amount that can be withdrawn so once withdrawn can be recycled for extra interest and increased withdraw amounts (next time round) as explained, each time you do this you will increase your % of the AAs. The point is that why would anyone who wishes to stay not keep doing this as it will increase your returns to the detriment of current holders who wish to withdraw funds. The analogy to shares or trusts does not hold because of the withdraw at par function. Dare I hope that some light is slowly beginning to appear over this thread which has been so consumed with unproductive heat? It would appear to the be case that when the SM starts, all existing withdrawal requests become queued offers to sell at par. If you have such a request, then you will get a share of any redemption capital (proportional to your holding, not your sell request). We've seen over the last few weeks that these are best described as a steady dribble. It would be rational, if you wanted to stay in, to put in a modest withdrawal request and use any released funds to buy back in at whatever discount was on offer [possibly using a second account in case the UI doesn't allow you to buy and sell at the same time]. And, yes, if everyone does that then the redemption capital will be spread more thinly and anyone who is insisting on getting no less than 100% back and who is also insisting on wanting it back now is going to be disappointed. Which takes us back full circle - anyone who thought that they could have returns greater than FSCS rates while having a guaranteed immediate 100% exit option was ... mistaken. If you absolutely must have your money out now then you will be able to - but the return will be at its current market value which might be less than 100%. Surely, once we return to a proper queue, any redemption capital will be paid to satisfy those at the front of the queue in full, regardless of any proportional holdings.
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cb25
Posts: 3,528
Likes: 2,668
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Post by cb25 on Jun 27, 2020 9:00:40 GMT
Dare I hope that some light is slowly beginning to appear over this thread which has been so consumed with unproductive heat? It would appear to the be case that when the SM starts, all existing withdrawal requests become queued offers to sell at par. If you have such a request, then you will get a share of any redemption capital (proportional to your holding, not your sell request). We've seen over the last few weeks that these are best described as a steady dribble. It would be rational, if you wanted to stay in, to put in a modest withdrawal request and use any released funds to buy back in at whatever discount was on offer [possibly using a second account in case the UI doesn't allow you to buy and sell at the same time]. And, yes, if everyone does that then the redemption capital will be spread more thinly and anyone who is insisting on getting no less than 100% back and who is also insisting on wanting it back now is going to be disappointed. Which takes us back full circle - anyone who thought that they could have returns greater than FSCS rates while having a guaranteed immediate 100% exit option was ... mistaken. If you absolutely must have your money out now then you will be able to - but the return will be at its current market value which might be less than 100%. Surely, once we return to a proper queue, any redemption capital will be paid to satisfy those at the front or the queue in full, regardless of any proportional holdings. These seem contradictory to me.
Edit: Stuart ( here) "Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace"
If that is the case, that the distribution is proportional to the lender's sell orders rather than the lender's holding in that access account, that will encourage lenders to put in more withdrawal requests. Only about 20% of my QAA money is on withdraw, but if the system decides total sell orders are the key, clear disadvantage to me to put a withdrawal in for the other 80%.
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dead-money
Rocket to the Moon
Posts: 746
Likes: 654
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Post by dead-money on Jun 27, 2020 10:48:06 GMT
Surely, once we return to a proper queue, any redemption capital will be paid to satisfy those at the front or the queue in full, regardless of any proportional holdings. These seem contradictory to me.
Edit: Stuart ( here) "Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace"
If that is the case, that the distribution is proportional to the lender's sell orders rather than the lender's holding in that access account, that will encourage lenders to put in more withdrawal requests. Only about 20% of my QAA money is on withdraw, but if the system decides total sell orders are the key, clear disadvantage to me to put a withdrawal in for the other 80%.
stuartassetzcapital This part clearly needs precise and public clarification from Assetz Capital, who have been very quiet and opaque regarding the timing and nature of changes to the withdrawal process.
This statement is the reason all my Access account holdings are queued for withdrawal regardless of my lack of need for the monies. If currently capital distributions are in proportion to holdings, (which I believe is the case? Where on AC website does it confirm this? ), I'd need confidence and assurance that this won't be changed again to cancel those withdrawal requests.
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alender
Member of DD Central
Posts: 981
Likes: 683
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Post by alender on Jun 27, 2020 11:33:15 GMT
I think you're making some good points, alender , and a lot of what your saying is true... but | Date | £m QAA
30DAA
90DAA
Total
MLA
| 1.4.20
| £63
£75
£75
T213
MLA120
| 1.5.20
| 63
76
76
T215
MLA118
| 1.6.20
| 63
76
78
T217
MLA114
| 2
| d
| 3
| d
| 4
| d
| 5
| d
| 6
| d
| 7
| d
| 8
| d
| 9
| d
| 10
| d
| 11
| d
| 12
| d
| 13
| d
| 14
| d
| 15
| 63
76
79
T218
MLA114
| 16
| 63
76
79
T218
MLA115
| 17
| d
| 18
| d
| 19
| d
| 20
| d
| 21
| d
| 22
| d
| 23
| d
| 24
| d
| 25
| d
| Date
| £m
QAA/30DAA
/90DAA/Total
MLA
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d=ditto.
The table above seems to show new money is and has been coming in for a while into the AA a/c's. (A few millions of pounds)
Also when an MLA purchase is made, I believe, it can be bought from the AA if their isn't anyone else selling from their MLA, again more new money. In fact in normal times there's more linkage between the MLA and AA than we've seen recently, so when the MLA gets back to more or normal fluidity it should help with the AA's liquidity.
I think I just said this elsewhere that AC received £15mm of Government money for lending with conditions a couple of months back.
Don't forget there's substantial room for "excess money" to sit in the AA's which doesn't actually hold loan units and still receives interest. And that is where I hope we'll get back to. I don't think we're looking at a run-down or just sitting static with money pretty much stuck in AA's - your scenario's seem to take that as a given. I think the 75%, you mention, haven't thought about it, are too busy with other things and won't be taking part... anyway let see what happens.
Would be good to know the source of the new money, if it is from some people buying into to AA perhaps in an ISA for long term holding then this will dry up while there is a discounted secondary market. If it is from elsewhere I have no idea where this could be, perhaps AC could give us this information.
I am just using example to explain how this will work, tt is obviously impossible to predict the overall effect of investors behaviour when the SM is operational but there is an opportunity to effectually clog up the withdrawal pool in order to maximise returns, it will no doubt be less than the 75% but a proportion will take this opportunity and why not, it is in the rules, if you don't you will be disadvantaged. I am not sure about the 75% who have not thought about this as this will only work once the SM is up and running but will not know the real effect as AC will not give us the information so we can see what is happening.
I am in two minds whether to bring this up as it alerts more people to this option but also informs current AA holders about this effect and perhaps puts pressure on AC to make changes to prevent this behaviour, this may well go the FO and/or FCA. I guess one good thing is that some people on here struggle to understand how to use this to maximise returns (with the side effect of clogging up the withdraw pool) and as most investors are not on this forum we can only hope very few notice this opportunity. However is is so obvious to me and a lot of P2P lenders are active investors looking for good opportunities and I believe will easily spot this, it may take a little while after the SM opens as most people will not take too much notice until this happens.
I brought this up before the changes to make repayments Pro Rata as this would greatly benefit people not in the AAs to buy in a small amount at a discount say 10% get it all out in a few months at an 11% gain plus interest and start again. Create new accounts for family members etc and multiply up your returns, perhaps AC took this on board when they changed to Pro Rata.
The only way to prevent this is to make any AA holdings bought on the SM subordinate, one way is to allow interest but no capital repayments while original holders of the AAs have withdraws in the pool.
It is a difficult area as some people in the AAs may need money quickly and making a subordinate product will probably increase the discount but if not it will disadvantage the other AA holders which had a lot to suffer already.
Part of the reason I bought into the AAs is because I was lead to believe from the T&Cs in the event of a liquidity crisis I would still get interest collected and capital repayments, with the preposed SM my capital repayments will further reduce and I did not sign up for this. It is mention on this forum that the T&Cs allow AC to make changes to the T&Cs, from my research and hearing from people with legal knowledge this is not allowed as it is an unfair terms of contract and is also against the FCA rules, I have provided links to a site with covers this but please anyone who thinks this is incorrect DYOR and please do not quote the AC T&Cs that states this is allowed as this does not make it legal.
Edit: Just realised some of the increase in AA funds could be people reinvesting the interest, again the SM will encourage people to remove the interest and buy back in for reasons given. This again will reduce mew money into the AAs the opening of the SM.
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cb25
Posts: 3,528
Likes: 2,668
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Post by cb25 on Jun 27, 2020 11:47:02 GMT
These seem contradictory to me.
Edit: Stuart ( here) "Any loan redemption capital that is repaid to investors is intended to be paid pro rata to the size of each Sell order instruction in the marketplace"
If that is the case, that the distribution is proportional to the lender's sell orders rather than the lender's holding in that access account, that will encourage lenders to put in more withdrawal requests. Only about 20% of my QAA money is on withdraw, but if the system decides total sell orders are the key, clear disadvantage to me to put a withdrawal in for the other 80%.
stuartassetzcapital This part clearly needs precise and public clarification from Assetz Capital, who have been very quiet and opaque regarding the timing and nature of changes to the withdrawal process.
This statement is the reason all my Access account holdings are queued for withdrawal regardless of my lack of need for the monies. If currently capital distributions are in proportion to holdings, (which I believe is the case? Where on AC website does it confirm this? ), I'd need confidence and assurance that this won't be changed again to cancel those withdrawal requests.
"Currently, as funds become available for withdrawal from the Access Account, these are allocated to an investor’s withdrawal request on a pro-rata basis directly related to each investor’s total investment in that loan within the relevant AA that they are withdrawing from, not the size of their withdrawal request" here
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iRobot
Member of DD Central
Posts: 1,680
Likes: 2,477
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Post by iRobot on Jun 27, 2020 14:00:09 GMT
I think you're making some good points, alender , and a lot of what your saying is true... but <snip> The table above seems to show new money is and has been coming in for a while into the AA a/c's. (A few millions of pounds)
<snip> Would be good to know the source of the new money, if it is from some people buying into to AA perhaps in an ISA for long term holding then this will dry up while there is a discounted secondary market. If it is from elsewhere I have no idea where this could be, perhaps AC could give us this information. <snip> Edit: Just realised some of the increase in AA funds could be people reinvesting the interest, again the SM will encourage people to remove the interest and buy back in for reasons given. This again will reduce mew money into the AAs the opening of the SM.
I've also been tracking the AA 'stats' and noticed the amount invested increasing. I attributed it to: a) new investors* b) a number of existing investors with standing orders which regularly 'feed' their account As a generalisation, I believe people are comparatively 'cash rich' in recent months given reduced options on discretionary spending. If correct, I expect that's even more true for users of P2P / AC / the AAs. * - lender numbers have also increased in the past few months, although I regard this as statistically aberrant; presumably, anyone who has withdrawn wholly and wishes to leave AC, still has a fraction of a penny in their account so can't close it. A 'Hotel California' situation exists which doesn't reflect the number of 'active' investors. Can't see changing that anytime soon. There's also a slant towards the 90DAA, which I'm guessing is, in part at least, people transferring into that account from the other AAs.
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dead-money
Rocket to the Moon
Posts: 746
Likes: 654
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Post by dead-money on Jun 27, 2020 17:57:03 GMT
stuartassetzcapital This part clearly needs precise and public clarification from Assetz Capital, who have been very quiet and opaque regarding the timing and nature of changes to the withdrawal process.
This statement is the reason all my Access account holdings are queued for withdrawal regardless of my lack of need for the monies. If currently capital distributions are in proportion to holdings, (which I believe is the case? Where on AC website does it confirm this? ), I'd need confidence and assurance that this won't be changed again to cancel those withdrawal requests.
"Currently, as funds become available for withdrawal from the Access Account, these are allocated to an investor’s withdrawal request on a pro-rata basis directly related to each investor’s total investment in that loan within the relevant AA that they are withdrawing from, not the size of their withdrawal request" hereAh, the spot the difference competition page ;-)
stuartassetzcapital A page on the AC Web site which showed when historically you've changed the rules and how would be useful. As would emails to lenders clearly outlining those changes. Similarly, is there a page showing the history of Access Account target interest rate changes over time?
Plus a guarantee that the rules for capital repayment won't be changed again once the AA SM is launched would be appreciated.
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