merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Dec 13, 2014 16:49:13 GMT
As possibly one of the triggers for this thread I deliberately did not contribute until most other members of the Forum had had a reasonable opportunity to have their say. However in the intervening time I have had a few off line nudges from other Forum members on my failure to participate. So here goes.
I don't count myself as an unsophisticated investor as I have investments in property, stocks and shares and directly in SME businesses. I joined AC in the late Spring/early Summer of 2013 by buying into loan #4 and have continued to invest in AC until very recently (I still have one Shadow Bid running). AC was not the first P2P lender I had joined having had quite a track record with FC and one other P2P provider. As with all new ventures I was initially cautious in my investments with AC but built up a reasonable holding in the medium five figure range. I was very impressed with the lending model that AC had developed, so much so that I went public on the subject, with supportive articles in the press and other public media. I attended the AC March 2014 meeting in London and again did my best to support the AC team by giving a video interview and encourage some of the attendees to invest with AC. At that meeting the "new system" was announced and described by Chris and Andrew. Although very much in favour of enhancing the old system, in private I counselled them to keep the new simple and as easy to use as the old system.
By mid summer I was beginning to get worried by the lack of new loans appearing and particularly so as at the March meeting AH had promised to reach £100M total invested by the end of 2014 and progress towards this figure was very slow. I was also becoming concerned at the drop in the percentage return offered on new loans. AC's advertising up until this time had offered returns of up to 12.5% but recent offerings were in the 10% range and appeared to be falling further. As I was budgeting for a 3% loss rate on AC loans and am a higher rate tax payer I need 10% gross as a minimum. So I was looking elsewhere to invest. Incidentally I know I was not alone in my sentiments.
Then we had the debacle of the new IT system. This did just about everything that I hoped it would not do and I became totally disenchanted with the whole system. Following rapidly on the heels of the duff IT system came a number of loans not completing on time accompanied by brave words from AH and me being accused of crying wolf. Well the wolf is still crying and if you take the time to open your eyes maybe you to will wake up to the fact that at this moment in time 21% of the active loan stock is currently in suspension and unavailable for trading.
Trust me says AH we haven't lost any of you capital yet. I note he does not include interest and seems not to accept that suspended loans are suspended not just for the fun of it but because there is a problem with them.
Yes I backed AC all the way a while back but I am far from sure I would now!
Finally do remember it is Andrew Holgate that we have to thank for the creation of this Forum following the acquisition of the "Old Inde" by FC. I just hope he does not come to regret doing it!
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hendragon
Member of DD Central
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Post by hendragon on Dec 13, 2014 17:31:54 GMT
as a lender (also in the 5 figure range) I can understand, but have reservations, about the previous post.
1 I am as frustrated as any lender by a certain number of loans. However the end result of these loans will not be known until either all repayments have been made of the charges on the security involved have been excercised.
2 As an experienced lender in the personal p2p sector I was not fully prepared for the timescales, and type of borrower, in this sector of p2p.
3 I work on a risk/reward calculation. As frustrating as it might be any monies in settled bids are not at risk until they are paid out. Returns will, therefore, be small or non-existent.
4 As lenders we are starting to sound like rail users and Beeching. We all hated the old system until it was replaced .Personally the new system does not really suit me. On the other hand I can see why AC did it. The unforseen problems? Well Ac have tried to create a unique platform. If you go back to the initial "mission statement" what they are doing does conform to their ideology. The execution has been flawed, but given the innovative nature of the platform it is understanable.
5 As lenders perhaps we need to keep perspective. We need AC to focus on the loans rather than PR.
Here endeth the sermon
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bigfoot12
Member of DD Central
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Post by bigfoot12 on Dec 13, 2014 17:33:23 GMT
As possibly one of the triggers for this thread I deliberately did not contribute until most other members of the Forum had had a reasonable opportunity to have their say. However in the intervening time I have had a few off line nudges from other Forum members on my failure to participate. So here goes.
I don't count myself as an unsophisticated investor as I have investments in property, stocks and shares and directly in SME businesses. I joined AC in the late Spring/early Summer of 2013 by buying into loan #4 and have continued to invest in AC until very recently (I still have one Shadow Bid running). AC was not the first P2P lender I had joined having had quite a track record with FC and one other P2P provider. As with all new ventures I was initially cautious in my investments with AC but built up a reasonable holding in the medium five figure range. I was very impressed with the lending model that AC had developed, so much so that I went public on the subject, with supportive articles in the press and other public media. I attended the AC March 2014 meeting in London and again did my best to support the AC team by giving a video interview and encourage some of the attendees to invest with AC. At that meeting the "new system" was announced and described by Chris and Andrew. Although very much in favour of enhancing the old system, in private I counselled them to keep the new simple and as easy to use as the old system.
By mid summer I was beginning to get worried by the lack of new loans appearing and particularly so as at the March meeting AH had promised to reach £100M total invested by the end of 2014 and progress towards this figure was very slow. I was also becoming concerned at the drop in the percentage return offered on new loans. AC's advertising up until this time had offered returns of up to 12.5% but recent offerings were in the 10% range and appeared to be falling further. As I was budgeting for a 3% loss rate on AC loans and am a higher rate tax payer I need 10% as a minimum. So I was looking elsewhere to invest. Incidentally I know I was not alone in my sentiments.
Then we had the debacle of the new IT system. This did just about everything that I hoped it would not do and I became totally disenchanted with the whole system. Following rapidly on the heels of the duff IT system came a number of loans not completing on time accompanied by brave words from AH and me being accused of crying wolf. Well the wolf is still crying and if you take the time to open your eyes maybe you to will wake up to the fact that at this moment in time 21% of the active loan stock is currently in suspension and unavailable for trading.
Trust me says AH we haven't lost any of you capital yet. I note he does not include interest and seems not to accept that suspended loans are suspended just for the fun of it but because there is a problem with them.
Yes I backed AC all the way a while back but I am far from sure I would now!
, what are your thoughts on the green fund? with a 3% budget and higher rate of tax it must look quite good to you. I'd be interested to hear your views independently of your concerns raised above.
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
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Post by merlin on Dec 13, 2014 18:08:07 GMT
The Green Fund. I cannot really comment on as when it was launched I thought it is not for me. I hate windmills I can see far too many of them from my home in Wales and would be a hypocrite if I started to invest in them!
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Neil
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Post by Neil on Dec 13, 2014 19:14:59 GMT
Thanks for making a post merlin. It sounds like you’re at the opposite end of the spectrum in terms of investing compared to my position but that’s what makes a forum such as this so important. Having opinions from across the entire AC community can only be positive. I can’t get into a detailed debate over facts and figures as I’d soon be out of my depth but I’d like to think I am capable of looking after my investments. I’m still happy with the available returns so obviously that is an area where people have to look at their own situations and decide what suits them. Well the wolf is still crying and if you take the time to open your eyes maybe you to will wake up to the fact that at this moment in time 21% of the active loan stock is currently in suspension and unavailable for trading. My eyes are open. The problem is, I’m a bit more positive. I’m not hugely sophisticated so could be wrong here but how have you arrived at “21% of the active loan stock”? I’ve just logged in, gone to “Browse Loans” and looked at the “Live Loans” tab. There are 77 live loans and 12 of them have “Investment Paused”. By my calculation that’s just under 16% “currently in suspension and unavailable for trading”? It’s worth pointing out that 1 of those is paused due to the tax issue being discussed, another has a repayment 1 day late so could be a banking issue and a 3rd has a late payment for the 9th month in a row (but the payments do come). I haven’t gone through all the others as I am not invested in some of them and don’t wish to waste all of my Saturday evening … So, is the glass half full or half empty? |
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
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Post by merlin on Dec 13, 2014 19:46:14 GMT
Neil is right the figure if 16% not 21%. Sorry I must have pushed the wrong button on my mental calculator. However even if it were only 10% I would still be worried. Given that your average return right now is less than 10%, can you really afford to lose 10% of your capital. You'd be better off putting your money in the Lottery at that rate! Having said that it is very unlikely that the 16% will all go completely bad and as most a backed by hard assets virtually no total losses should occur. However that is what P2P is all about managing risk.
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mikes1531
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Post by mikes1531 on Dec 15, 2014 0:36:43 GMT
Neil is right the figure if 16% not 21%. Sorry I must have pushed the wrong button on my mental calculator. However even if it were only 10% I would still be worried. Given that your average return right now is less than 10%, can you really afford to lose 10% of your capital. You'd be better off putting your money in the Lottery at that rate! Having said that it is very unlikely that the 16% will all go completely bad and as most a backed by hard assets virtually no total losses should occur. However that is what P2P is all about managing risk. While 16% is what results if you divide 12 by 77, I've just taken a good look at the 'Browse Loans' list, and I see 16 loans with the 'Investments Paused' flag. 16/77 actually is 21%, so I think merlin was too quick with his apology. Furthermore, when I saw merlin's "21% of the active loan stock" comment I presumed he was looking at the percentage amount of loan parts that were unsellable. Inasmuch as four of the suspended loans are four of the six largest active loans AC have, and total £8.85M, I suspect the percentage of loan parts tied up in suspended loans actually is more than 21%. Has anyone tried to do that calculation? I thought there was somewhere on the AC website where the total amount of AC loans made was stated, but I've been unable to find that. What I did find, was the 10/Nov blog entry announcing that AC had gone over the £50M of lending level. With seemingly little activity since then, I'd guess the total now stands in the £55-60M range. ISTM that at the time of the publication of that blog entry the question was raised in this forum regarding how AC were counting loans where an 'extension' loan was created for an overdue loan, and specifically whether the new loan with a new loan number was being added to the cumulative total. AFAIK, there never was a response from AC about that. I would hope not, but I've not tried calculating the grand total myself, so I really don't have a clue what's been done. Inasmuch as some loans have been repaid, the total of outstanding loans is probably around £50M. Adding up the total of the 16 suspended loans, I get £12.2M, which suggests that somewhere close to 25% by value of AC active loans are currently suspended from Aftermarket trading. That doesn't make a very pretty picture!  EDIT: I've discovered that I can cut/paste the entire 'Browse Loans' list into Excel. From that, the total size of the 77 active loans is £39.2M. So the £12.2M of suspended loans represents 31% of AC's total loan book.
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pikestaff
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Post by pikestaff on Dec 15, 2014 9:01:50 GMT
I agree £12.1m or 31% is a scary figure but this includes
£3.4m #143 WT suspended because of tax issue
£460k #127 WT suspended because of covenant breach but there is no real doubt as to performance
£1.6m #90 WT suspended because a couple of days late which it has been every month. Not too worried yet. There are a few other loans in this category too.
I also expect the defaulted bridges to give close to a full recovery, although we may not recover all of the default interest. The loans that worry me most are:
£104k #35 G*2
£425k #39 Wood***
£250k #41 Etric***
£700k #70 F*** F***
together totalling just under £1.5m.
Although AC has had a bit of a rocky time with the bridges I see nothing yet to suggest that actual losses across the portfolio will be more than a couple of % which is OK.
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Neil
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Post by Neil on Dec 15, 2014 10:59:59 GMT
Neil is right the figure if 16% not 21%. Sorry I must have pushed the wrong button on my mental calculator. However even if it were only 10% I would still be worried. Given that your average return right now is less than 10%, can you really afford to lose 10% of your capital. You'd be better off putting your money in the Lottery at that rate! Having said that it is very unlikely that the 16% will all go completely bad and as most a backed by hard assets virtually no total losses should occur. However that is what P2P is all about managing risk. While 16% is what results if you divide 12 by 77, I've just taken a good look at the 'Browse Loans' list, and I see 16 loans with the 'Investments Paused' flag. 16/77 actually is 21%, so I think merlin was too quick with his apology. On Saturday there was 12. Yesterday there was 16. Today there is 17. #53 added to the list last night but they couldn't make a repayment on a Sunday so you'd expect them to come off the list again today or tomorrow. Pikestaff's post above sums things up nicely for me.
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warn
Member of DD Central
Curmudgeon
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Post by warn on Dec 15, 2014 11:33:09 GMT
While 16% is what results if you divide 12 by 77, I've just taken a good look at the 'Browse Loans' list, and I see 16 loans with the 'Investments Paused' flag. 16/77 actually is 21%, so I think merlin was too quick with his apology. On Saturday there was 12. Yesterday there was 16. Today there is 17. #53 added to the list last night but they couldn't make a repayment on a Sunday so you'd expect them to come off the list again today or tomorrow. Pikestaff's post above sums things up nicely for me. Would it not make sense for the system to pause investments only if repayment missed the first available banking day?
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Post by chris on Dec 15, 2014 12:13:09 GMT
On Saturday there was 12. Yesterday there was 16. Today there is 17. #53 added to the list last night but they couldn't make a repayment on a Sunday so you'd expect them to come off the list again today or tomorrow. Pikestaff's post above sums things up nicely for me. Would it not make sense for the system to pause investments only if repayment missed the first available banking day? At the moment it's aggressive in shutting things down, there's an internal discussion happening now as to what a more sensible procedure would be if indeed we wish to change it.
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oldgrumpy
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Post by oldgrumpy on Dec 15, 2014 12:39:13 GMT
On that matter of repayment dates, RS do not schedule repayments on Saturdays, Sundays, or Bank Holidays; they are listed for payment on the first working day following such dates. I am surprised AC haven't programmed this into their borrowers' schedules. That would delay the present "trigger" a bit, but I don't suppose the dates can be altered retrospectively.
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Post by chris on Dec 15, 2014 12:48:24 GMT
On that matter of repayment dates, RS do not schedule repayments on Saturdays, Sundays, or Bank Holidays; they are listed for payment on the first working day following such dates. I am surprised AC haven't programmed this into their borrowers' schedules. That would delay the present "trigger" a bit, but I don't suppose the dates can be altered retrospectively. Yeah we can adjust the dates, and it is something on our to do list but has always been a bit of a low priority compared to some of the other changes we've been making.
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