ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 7, 2021 17:20:45 GMT
Hi all, just wondering if I can check something with people around here who are clearly a lot more knowledgeable than me  . I have a lump sum invested in the QAA, but when I view the actual holdings, the sum only comes to about 84% of my total lump sum investment. Does that mean that 16% is just held as free cash , and if so is this a good thing ? ie does the 16% contribute to the PF ? Also does the free cash % vary a lot from day to day ? Thanks in advance. Yes, 16% is currently free cash and as such it wont contribute to the PF as it doesnt earn interest (towards the account target). The account has always held some free cash to to provide the liquidity smoothing for the withdrawal process ie there doesnt have to be someone investing in order to facilitate an exit. The cash element has increased since the AA became the defacto underwriter of loans & tranches, though it can fluctuate significantly. 16% is towards the top end of historical cash levels pre-abnormal circumstances but not out of line.
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dead-money
Rocket to the Moon
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Post by dead-money on Mar 7, 2021 17:34:23 GMT
£10 to release £10,000? That’s as near to instant access as makes no difference. It shows there is real solid demand for this product, if only AC could announce the new “normal”. Well I just dropped a spare £10K into QAA, as it wasn't doing anything in the MLA, and received 0.1% discount; now showing 0.8% discount to sell, so that would be £80...
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alender
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Post by alender on Mar 7, 2021 23:50:28 GMT
The cash element has increased since the AA became the defacto underwriter of loans & tranches, though it can fluctuate significantly. 16% is towards the top end of historical cash levels pre-abnormal circumstances but not out of line. This is what I have been saying for a long time, the AAs are beings used by AC for the purpose of supporting AC and not necessarily in the best interest of the AA holders. As I said since lock in the AAs are now AC's lender of last resort using lender funds requested for withdrawals under the terms of the access periods.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 8, 2021 0:29:12 GMT
The cash element has increased since the AA became the defacto underwriter of loans & tranches, though it can fluctuate significantly. 16% is towards the top end of historical cash levels pre-abnormal circumstances but not out of line. This is what I have been saying for a long time, the AAs are beings used by AC for the purpose of supporting AC and not necessarily in the best interest of the AA holders. As I said since lock in the AAs are now AC's lender of last resort using lender funds requested for withdrawals under the terms of the access periods. The AAs became defacto underwriters several years ago so Im not sure my post supports your argument. ISTM that it was in the best interests of AA lenders that borrowers were supported by the provision of funds to enable them to navigate the difficulties of Covid via forbearance (in line with govt & regulator policy) or to continue development projects rather than allow the loans to default & enter recovery probably to the detriment of lenders (exhaustion of PF, funds locked in non-tradeable loans). There is clear evidence that this has been successful with most loans now operating as normal and significant redemptions from development exits and others. They have not funding new lending. I see little evidence that the AA are being used to support AC other than the lender fee which has no impact on funds available for withdrawal. The AA are not the lender of last resort, they are the lender of first resort and have been for several years. That said the sums being advanced are fairly insignificant as there is limited forbearance and few development drawdowns. It is most likely that cash reserves are being maintained to allow normal operation to resume once the there is clear evidence that the govt roadmap is solid.
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alender
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Post by alender on Mar 8, 2021 0:54:57 GMT
This is what I have been saying for a long time, the AAs are beings used by AC for the purpose of supporting AC and not necessarily in the best interest of the AA holders. As I said since lock in the AAs are now AC's lender of last resort using lender funds requested for withdrawals under the terms of the access periods. The AAs became defacto underwriters several years ago so Im not sure my post supports your argument. ISTM that it was in the best interests of AA lenders that borrowers were supported by the provision of funds to enable them to navigate the difficulties of Covid via forbearance (in line with govt & regulator policy) or to continue development projects rather than allow the loans to default & enter recovery probably to the detriment of lenders (exhaustion of PF, funds locked in non-tradeable loans). There is clear evidence that this has been successful with most loans now operating as normal and significant redemptions from development exits and others. They have not funding new lending. I see little evidence that the AA are being used to support AC other than the lender fee which has no impact on funds available for withdrawal. The AA are not the lender of last resort, they are the lender of first resort and have been for several years. That said the sums being advanced are fairly insignificant as there is limited forbearance and few development drawdowns. It is most likely that cash reserves are being maintained to allow normal operation to resume once the there is clear evidence that the govt roadmap is solid. If it is the case that it has not changed since the lock in why has the cash element been increased (as you stated) and not used for withdrawals if not for covering underwriting of loans. Before lock in each lender could decide they did not like the situation of being the underwriter and withdraw, now all lenders are being forced to underwrite loans against many lenders wishes, otherwise why would the withdrawal queue be so large.
When there are no other lenders by definition the lender of last resort is also the lender of first resort as no one else who wants these loans. Before lock in AAs would have leant some of the funds to future tranches etc but some funds would have come from other sources like MLA, institutional investors. Now these have disappeared the AAs are taking up all of the burden. As you say this could well be protecting exiting loans but these loans are not held 100% by AA holders. Therefore AA holders funding of future tranches are protecting loans parts from outside the AAs, this does not seem fair to me unless the AA investors are not locked in otherwise they are forced to do this against their will.
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Post by oppsididitagain on Mar 8, 2021 8:30:26 GMT
SHM is 0.5% / 0.6%.
I just invested 2K at 0.5%
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Post by oppsididitagain on Mar 8, 2021 9:04:04 GMT
Its the start of the new ISA allowance in 4 weeks.
Maybe its the start of A rush of cash being taken out, only to be put back in the following week :-)
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ceejay
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Post by ceejay on Mar 8, 2021 9:31:34 GMT
SHM is 0.5% / 0.6%. I just invested 2K at 0.5% Didn't last long. I was just offered 0.09% for a small reinvestment.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 8, 2021 9:46:28 GMT
The AAs became defacto underwriters several years ago so Im not sure my post supports your argument. ISTM that it was in the best interests of AA lenders that borrowers were supported by the provision of funds to enable them to navigate the difficulties of Covid via forbearance (in line with govt & regulator policy) or to continue development projects rather than allow the loans to default & enter recovery probably to the detriment of lenders (exhaustion of PF, funds locked in non-tradeable loans). There is clear evidence that this has been successful with most loans now operating as normal and significant redemptions from development exits and others. They have not funding new lending. I see little evidence that the AA are being used to support AC other than the lender fee which has no impact on funds available for withdrawal. The AA are not the lender of last resort, they are the lender of first resort and have been for several years. That said the sums being advanced are fairly insignificant as there is limited forbearance and few development drawdowns. It is most likely that cash reserves are being maintained to allow normal operation to resume once the there is clear evidence that the govt roadmap is solid. If it is the case that it has not changed since the lock in why has the cash element been increased (as you stated) and not used for withdrawals if not for covering underwriting of loans. Before lock in each lender could decide they did not like the situation of being the underwriter and withdraw, now all lenders are being forced to underwrite loans against many lenders wishes, otherwise why would the withdrawal queue be so large. As I said the cash element isnt unusual and is probably part of a planned return to normal conditions. I suspect the queue isnt large, mainly consisting of people who arent looking to exit but have withdrawals to provide flexibility through the receipt of redemptions which they can then redeploy at their discretion. Anyone wanting to exit would be doing so at a discount as they have no idea of queue position & timeframe otherwise.
The AA are the lender. Its not a question of no-one else wanting the loans they arent offered them as thats the way the platform works, guaranteed funding removing uncertainly, and to attempt to pivot away from that during an economic crisis would have been a dangerous move & unlikely in lenders best interests. Once the AA has funded the requirement then in many cases the cash will have been released by incoming MLA funds as always. Institutional investing is separate apart from one fund that invests via the MLA. No evidence that the AA is taking all the burden, MLA probably picking up more than before due to significant redemptions and limited availability encouraging widening of investment criteria to avoid cash drag. You are right that in protecting AA investors they are protecting all investors in a loan but it wouldnt make any sense to damage AA investors just because it also benefits others as a by-product. In any case, CBILS have picked up most of the load and AA lending is fairly minimal.
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Post by oppsididitagain on Mar 8, 2021 9:50:10 GMT
0.2 /0.5. % if you are quick
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alender
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Post by alender on Mar 8, 2021 10:26:23 GMT
If it is the case that it has not changed since the lock in why has the cash element been increased (as you stated) and not used for withdrawals if not for covering underwriting of loans. Before lock in each lender could decide they did not like the situation of being the underwriter and withdraw, now all lenders are being forced to underwrite loans against many lenders wishes, otherwise why would the withdrawal queue be so large. As I said the cash element isnt unusual and is probably part of a planned return to normal conditions. I suspect the queue isnt large, mainly consisting of people who arent looking to exit but have withdrawals to provide flexibility through the receipt of redemptions which they can then redeploy at their discretion. Anyone wanting to exit would be doing so at a discount as they have no idea of queue position & timeframe otherwise.
The AA are the lender. Its not a question of no-one else wanting the loans they arent offered them as thats the way the platform works, guaranteed funding removing uncertainly, and to attempt to pivot away from that during an economic crisis would have been a dangerous move & unlikely in lenders best interests. Once the AA has funded the requirement than in many cases the cash will have been released by incoming MLA funds as always. Institutional investing is separate apart from one fund that invests via the MLA. No evidence that the AA is taking all the burden, MLA probably picking up more than before due to significant redemptions and limited availability encouraging widening of investment criteria to avoid cash drag. You are right that in protecting AA investors they are protecting all investors in a loan but it wouldnt make any sense to damage AA investors just because it also benefits others as a by-product. In any case, CBILS have picked up most of the load and AA lending is fairly minimal. So you are saying that the cash element was this large before lock in, I find that hard to believe especially as the lock in occurred because there was not enough cash to cover withdrawals, There are also some old posts on this board stating that AC came close to not having enough cash in the AAs to cover withdraws etc a time before lock in with far less cash than they have now. It may peek at the start of ISA season but I very much doubt it was this large (if at all) for so long before lock in. Also why did AC keep offering bonuses to new investments if the AAs were swimming in this much cash.
Any investment with this much non earning cash for any significant length of time is a poor investment.
From my understanding before lock in these tranches were partly funded from other sources, if you are correct and there are other sources for these loans why have AC not used them taking pressure off the AAs and allowing people to get more of their own money back. If MLA lenders are picking up some of these loans surly we would have heard about this given the amount of discussion on this broad about 1 or 2 new loans.
The one thing we do know is AC have all this information but refuse to give this to investors not matter how many times they are asked, we should be given this information after all it is our money and we have a right to know not only what they are doing with it, especially why as they refuse to give it back under the access terms of exit. Given the way AC quickly reply if they can criticise a post they do not like I believe if you are correct AC would have responded with some information on why this wrong, given their lack of response and a point blank refusal to supply any meaningful data a logical assumption is that they are afraid to tell investors what they are up to.
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jlend
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Post by jlend on Mar 8, 2021 11:07:27 GMT
I have sufficient information to know broadly cash levels in the AAs on certain days across a range of dates. And in what is becoming a de facto mandatory declaration in every post I make (about which companies and organisations I DON’T work for) I don’t work for AC  AAers are primarily in AAs because they wanted a black box investment and did not want to worry about crunching information. But the information of the portfolio composition is there every second of the day 24/7, 365 days a year. AAers are also primarily in AAs because they didn’t want to make investment decisions. It shouldn’t be then surprising that AC don’t give minute by minute chapter and verse on every current and future decisions on every single loan. But again if you dive into each loan a lot of that information is there broadly on drawdowns, development progress, the plan ahead for each loan and development. AAers delegated their management of the portfolio money to AC so they don’t get to vote. Other than that they have as much information about each loan as MLA investors. For the avoidance of doubt I still don’t work for AC AC have said in the past that AA lenders don't get to vote as they are covered by the AA provision funds. Lenders would be given the opportunity to vote if there was insufficient money in the PFs to cover expected capital losses. This is why GBBA etc lenders were given the opportunity to vote from the start as there was no PF ring fencing in these accounts. Last year AA holders were given the opportunity to vote in the wider forebearance vote across the loan book. This made sense as the forebearance drawdown money came from the access accounts (subsequently some from CBIL) rather than the MLA. It wouldn't have made much sense for only manual lenders to vote on forebearance drawdowns that would have come from the Access Accounts. Given all the FCA caveats regarding provision funds that AC and others have had to add to their websites I do sometimes wonder whether AA lenders should be able to vote. I don't expect any change in the voting process for individual loans going forward unless the FCA felt it was unreasonable. Difficult to know how many AA holders would make use of the vote if they had the opportunity. We see some votes that result in subsequent drawdowns from the Access Accounts. It might make sense to allow the Access Account holders to vote on these, but I doubt AC would want to make the process more complicated to allow AA lenders to vote on specific loans. The current voting process is a bit messy where you can have loans majority funded by the access accounts that are voted on by only the manual lenders. I don't know of any instances where this has caused a specific issue though.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 8, 2021 11:18:28 GMT
As I said the cash element isnt unusual and is probably part of a planned return to normal conditions. I suspect the queue isnt large, mainly consisting of people who arent looking to exit but have withdrawals to provide flexibility through the receipt of redemptions which they can then redeploy at their discretion. Anyone wanting to exit would be doing so at a discount as they have no idea of queue position & timeframe otherwise.
The AA are the lender. Its not a question of no-one else wanting the loans they arent offered them as thats the way the platform works, guaranteed funding removing uncertainly, and to attempt to pivot away from that during an economic crisis would have been a dangerous move & unlikely in lenders best interests. Once the AA has funded the requirement than in many cases the cash will have been released by incoming MLA funds as always. Institutional investing is separate apart from one fund that invests via the MLA. No evidence that the AA is taking all the burden, MLA probably picking up more than before due to significant redemptions and limited availability encouraging widening of investment criteria to avoid cash drag. You are right that in protecting AA investors they are protecting all investors in a loan but it wouldnt make any sense to damage AA investors just because it also benefits others as a by-product. In any case, CBILS have picked up most of the load and AA lending is fairly minimal. So you are saying that the cash element was this large before lock in, I find that hard to believe especially as the lock in occurred because there was not enough cash to cover withdrawals, There are also some old posts on this board stating that AC came close to not having enough cash in the AAs to cover withdraws etc a time before lock in with far less cash than they have now. It may peek at the start of ISA season but I very much doubt it was this large (if at all) for so long before lock in. Also why did AC keep offering bonuses to new investments if the AAs were swimming in this much cash.
Any investment with this much non earning cash for any significant length of time is a poor investment.
From my understanding before lock in these tranches were partly funded from other sources, if you are correct and there are other sources for these loans why have AC not used them taking pressure off the AAs and allowing people to get more of their own money back. If MLA lenders are picking up some of these loans surly we would have heard about this given the amount of discussion on this broad about 1 or 2 new loans.
The one thing we do know is AC have all this information but refuse to give this to investors not matter how many times they are asked, we should be given this information after all it is our money and we have a right to know not only what they are doing with it, especially why as they refuse to give it back under the access terms of exit. Given the way AC quickly reply if they can criticise a post they do not like I believe if you are correct AC would have responded with some information on why this wrong, given their lack of response and a point blank refusal to supply any meaningful data a logical assumption is that they are afraid to tell investors what they are up to.
No, I said it has been this large historically, it fluctuates. I am not aware of tranches being funded from other sources. The only other sources are private UW, who have funded the two small new loans that have been offered during lockdown. UW funds are not guaranteed and introduce an element of uncertainty & delay which is unsuitable for funding of existing tranches when security of funding is required. It doesnt matter if new loans arent funded, they dont go ahead, it does matter is tranches arent funded promptly, the project fails. (Obviously CBILS since the lockdown but dependent on eligibility criteria) MLA clearly are picking up bits of loans, hence the significant drop in loans with availability. Doesnt surprise me that no discussion here, there is very little discussion of existing loans (very little discussion of P2P) and would be a very boring thread, got a £1 of #1156, got £1.30 of £1156 etc, that just cant compete with the excitement of Wickes offering wood in inches as well as mm. They use to respond but regulatory changes and the level of opprobrium that tends to follow seems to have curtailed participation in these forums - 6 months for Stuart, same for chris other than a couple of responses to technical glitches. Oh & I also dont work for AC, though I do make work for AC.
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jlend
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Post by jlend on Mar 8, 2021 11:36:12 GMT
Have we seen any indication of any loan parts in the access accounts being made available to MLA lenders since normal market conditions ceased?
I wonder if AC have tried this to speed up the cash balance in the AAs and hence the at par withdraws.
Obviously AC would need to be careful about the diversity in the AAs and its dependent on demand from manual lenders.
I am assuming the answer is no as AC don't want to run down the AAs.
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alender
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Post by alender on Mar 8, 2021 11:36:38 GMT
I have sufficient information to know broadly cash levels in the AAs on certain days across a range of dates. And in what is becoming a de facto mandatory declaration in every post I make (about which companies and organisations I DON’T work for) I don’t work for AC AAers are primarily in AAs because they wanted a black box investment and did not want to worry about crunching information. But the information of the portfolio composition is there every second of the day 24/7, 365 days a year. AAers are also primarily in AAs because they didn’t want to make investment decisions. It shouldn’t be then surprising that AC don’t give minute by minute chapter and verse on every current and future decisions on every single loan. But again if you dive into each loan a lot of that information is there broadly on drawdowns, development progress, the plan ahead for each loan and development. AAers delegated their management of the portfolio money to AC so they don’t get to vote. Other than that they have as much information about each loan as MLA investors. For the avoidance of doubt I still don’t work for AC No one can know the primary reason why most people invested in the AAs but they can only speak for themselves and possible other people they know. Before lock in my primary reason to invest in AAs was access, as this is such a primary part of the accounts it is in the name of the accounts. It cannot be made clearer than that to investors.
However I do believe there are a large number of AA lenders if not most invested because of the access to their funds, the other reasons about black box etc played a roll but are not the primary reason for most people. If AC thought that the main reason for attracting people was the black box aspect of the accounts why is this or something like it not in the name, AC cleanly marketed these accounts on the access principle because this is what attracted most people. To add weight to this argument I talked to AC before and after investing in the accounts and they were very confident (even a few weeks before lock in) that access could be maintained and every time stated that ever since the accounts were created full access has been maintained and there were no reasons to believe this would not continue.
On the subject of voting, there are an awful lot of AA holders voting with their feet via withdrawals.
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