koba
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Post by koba on Dec 19, 2014 19:28:20 GMT
I got a stunning 0.25% fill of my target for the only new issue since the new business model was rolled out. Not a great start but that may have been a one off. I personally have little interest in picking up retreads from the SM. My interest in in getting a good allocation on issue and using the SM to shape my own amortisation schedule. I am a regular seller of small amounts but have never bought. The shadow bidding account was very useful for picking up a guaranteed fill in decent size and I am sorry to see the old auction system go - drawdown delays or no. The jury is still out on the new system and will be until we see some fresh meat in the trough. I am not overly concerned. There are alternatives and quite frankly I think the allure of P2P for investors such as myself who look to slot loans into a diversified portfolio including equities, property, EIS investments and so forth may well turn out to have been a limited time opportunity anyway (returns are already pressing the lower limit of what is required to be competitive at a portfolio level). I don't blame AC for going for the small retail money - that is clearly where the opportunity is. So long as my current investments continue to be properly administered, I can wait to see what happens with the rest. Personally as somebody who is in the "HNW" category, I don't actually find the new system works well at all. The AC strategy is clearly to focus on a barbell of big investors (misnamed underwriters), deploying six figures into a single loan or small retail investors. This does somewhat squeeze out somebody like myself who wants a well diversified portfolio of loans in the £10k territory. My exposure has already dropped by around 20% over the past few months, with proceeds being diverted over to TC. It's just hard to deploy meaningful capital right now on AC without the shadow bidding facility. Leaving a significant amount of unencumbered cash seems to only pick up shrapnel. Weak deal flow, limited variety, lower yields and zero incentives (the underwriters get those) compound this. I am not about to depart AC; it's still one of my top three P2P platforms. However, my expectation of AC becoming comfortably my largest platform has gone since it's competitive advantage just isn't there. |
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shimself
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Post by shimself on Dec 19, 2014 19:36:09 GMT
I think it's partly lack of visibility. We don't now see NEW LOAN BID NOW sort of promotion.
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acorn
Posts: 118
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Post by acorn on Dec 20, 2014 1:48:13 GMT
Personally, I have only moved my investment sideways, into existing loans, with one new loan (in draw down terms) exception. The new ability to snip what I want has facilitated this process. The bridging loans/poor introducer wake-up call was bound to bring about a re-appraisal in both Assetz and its customer base in P2P. Very brave of Assetz to do this in public rather than retreat behind closed doors - not hero worship, just fact, no smoke and mirrors here! Partly as a result of this only two loans have drawn down so far this month, so I don't think any one type of investor is being favoured over the others. It is surely better to deal with current problems properly and establish a more secure forward path than blunder on regardless.
I am surprised that direct debits are not the normal means of making payment and that the whole repayments process is not more tightly controlled. I don't know what assertive action is acceptable these days when clients push the boundaries but I'm pretty sure that "sending in the heavies" isn't an option. My perception is that there isn't quite enough cover on the ground and people are a bit over-stretched, not delegating appropriately or have no-one to delegate to.
I am supportive of what is being done here but also recognise that it is a real time "work in progress", warts and all, so look forward with interest to what January will bring.
Now, where's my toast?
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bg
Member of DD Central
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Post by bg on Dec 20, 2014 9:39:16 GMT
Personally as somebody who is in the "HNW" category, I don't actually find the new system works well at all. The AC strategy is clearly to focus on a barbell of big investors (misnamed underwriters), deploying six figures into a single loan or small retail investors. This does somewhat squeeze out somebody like myself who wants a well diversified portfolio of loans in the £10k territory. My exposure has already dropped by around 20% over the past few months, with proceeds being diverted over to TC. It's just hard to deploy meaningful capital right now on AC without the shadow bidding facility. Leaving a significant amount of unencumbered cash seems to only pick up shrapnel. Weak deal flow, limited variety, lower yields and zero incentives (the underwriters get those) compound this. I am not about to depart AC; it's still one of my top three P2P platforms. However, my expectation of AC becoming comfortably my largest platform has gone since it's competitive advantage just isn't there. I kind of disagree with this. I think it's just a general lack of loan rather than the way the platform is structured or targeted. It's a supply and demand issue rather than anything else. Take the foster loan the other day (the first loan to drawdown in a while). It was only £100k and there was probably 40-50 investors looking to buy a chunk - no wonder people are disappointed. If a few loans in the £500-£1000k category hit the market (hopefully in January?) then I'm sure you'd be able to grab your £10k investments..
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sl75
Posts: 2,092
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Post by sl75 on Dec 20, 2014 13:37:48 GMT
... so I don't think any one type of investor is being favoured over the others... It is inevitable that one group of investors will feel another group is being favoured over it. Consider 3 investors (who for sake of argument are the only ones seeking to buy a particular loan). One seeks £10 exposure in the loan, one seeks £10,000 exposure, and another has a spouse and they pool their resources, but have an account in each of their names each seeking £100 exposure. Under the present system each *account* gets an equal GBP amount of any loan units that become available up to the specified limit. Suppose £100 of the loan gets sold. The small investor gets the whole of their desired £10 allocation. The large investor gets only £30 - barely big enough to stop calling it "shrapnel". The married investor gets £60, £30 in each account. This system favours multiple accounts - there would be an incentive for the large investor (or indeed any investor who finds they can't get their entire desired allocation in a single account) to get creative and open accounts in the names of as many different legal entities as possible. An alternative system would be to allocate a pro-rata share of the available loan units according to the amount requested - with a total of £10,210 of exposure demanded, a sale of £100 would have £97.94 allocated to the large investor. The married investor would receive £0.98 in each of the 2 accounts, and the small investor just £0.10 Whilst this removes the incentive for opening multiple accounts (the married investor would get exactly the same allocation for £200 of demand in a single account), it is open to a different kind of gaming... An investor could falsely state their desired exposure as an order of magnitude higher than it really is, in order to get the allocation they really wanted (and if they overshoot they'll just reduce their target to the true amount, and there'll be plenty of demand to take it off their hands). In any case, even without this gaming, allocating the lions share to the large investor will be perceived by the small investor as unfair when they only got 10 pence. I don't see it as possible to have an allocation that avoids some investors feeling that others are being favoured over them.
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mikes1531
Member of DD Central
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Post by mikes1531 on Dec 20, 2014 21:57:24 GMT
Take the foster loan the other day (the first loan to drawdown in a while). It was only £100k and there was probably 40-50 investors looking to buy a chunk - no wonder people are disappointed. Do we even know if the underwriters have released their entire holdings of that loan onto the Aftermarket already?
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bigfoot12
Member of DD Central
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Post by bigfoot12 on Dec 22, 2014 11:25:44 GMT
... so I don't think any one type of investor is being favoured over the others... It is inevitable that one group of investors will feel another group is being favoured over it. Consider 3 investors (who for sake of argument are the only ones seeking to buy a particular loan). One seeks £10 exposure in the loan, one seeks £10,000 exposure, and another has a spouse and they pool their resources, but have an account in each of their names each seeking £100 exposure. Under the present system each *account* gets an equal GBP amount of any loan units that become available up to the specified limit. Suppose £100 of the loan gets sold. The small investor gets the whole of their desired £10 allocation. The large investor gets only £30 - barely big enough to stop calling it "shrapnel". The married investor gets £60, £30 in each account. This system favours multiple accounts - there would be an incentive for the large investor (or indeed any investor who finds they can't get their entire desired allocation in a single account) to get creative and open accounts in the names of as many different legal entities as possible. An alternative system would be to allocate a pro-rata share of the available loan units according to the amount requested - with a total of £10,210 of exposure demanded, a sale of £100 would have £97.94 allocated to the large investor. The married investor would receive £0.98 in each of the 2 accounts, and the small investor just £0.10 Whilst this removes the incentive for opening multiple accounts (the married investor would get exactly the same allocation for £200 of demand in a single account), it is open to a different kind of gaming... An investor could falsely state their desired exposure as an order of magnitude higher than it really is, in order to get the allocation they really wanted (and if they overshoot they'll just reduce their target to the true amount, and there'll be plenty of demand to take it off their hands). In any case, even without this gaming, allocating the lions share to the large investor will be perceived by the small investor as unfair when they only got 10 pence. I don't see it as possible to have an allocation that avoids some investors feeling that others are being favoured over them. Another alternative, which would be my preference, would be first come first served. Whoever had placed his order and funded it first would be filled before the others. There is no incentive for multiple accounts. 'Shrapnel' is reduced. Those with unspent cash on the platform for longer are likely to be favoured over those who have had their money waiting for a short time. There is no obvious preference between large and small investors. I suspect that doing it well would be complicated to implement and doing it badly (such as the original Zopa system) would be worse than the current system.
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sl75
Posts: 2,092
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Post by sl75 on Dec 22, 2014 12:47:34 GMT
Another alternative, which would be my preference, would be first come first served. Whoever had placed his order and funded it first would be filled before the others. There is no incentive for multiple accounts. 'Shrapnel' is reduced. Those with unspent cash on the platform for longer are likely to be favoured over those who have had their money waiting for a short time. There is no obvious preference between large and small investors. I suspect that doing it well would be complicated to implement and doing it badly (such as the original Zopa system) would be worse than the current system. This would still have an incentive to operate multiple accounts. One account would hold funds that had been waiting a long time in order to purchase units of "rare" loans for which a long queueing time is necessary, and the other would have a rapid turnover of funds in order to purchase units of "common" loans where the queue is largely irrelevant. Doing the same in a single account would never result in funds being "old" enough to get close to the front of the queue for purchasing any units of the "rare" loans, unless a mechanism is ALSO introduced to reserve funds exclusively for a "rare loans order". It also becomes very difficult to define what is "first" without a substantial redesign of the current target-based system.
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niceguy37
Member of DD Central
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Post by niceguy37 on Dec 22, 2014 14:02:42 GMT
Another alternative, which would be my preference, would be first come first served. Whoever had placed his order and funded it first would be filled before the others. There is no incentive for multiple accounts. 'Shrapnel' is reduced. Those with unspent cash on the platform for longer are likely to be favoured over those who have had their money waiting for a short time. There is no obvious preference between large and small investors. I suspect that doing it well would be complicated to implement and doing it badly (such as the original Zopa system) would be worse than the current system. This would still have an incentive to operate multiple accounts. One account would hold funds that had been waiting a long time in order to purchase units of "rare" loans for which a long queueing time is necessary, and the other would have a rapid turnover of funds in order to purchase units of "common" loans where the queue is largely irrelevant. Doing the same in a single account would never result in funds being "old" enough to get close to the front of the queue for purchasing any units of the "rare" loans, unless a mechanism is ALSO introduced to reserve funds exclusively for a "rare loans order". It also becomes very difficult to define what is "first" without a substantial redesign of the current target-based system. It's tricky to have a model that everyone is happy with, and that allows prompt investment without too much dead time, in the loans you prefer: p2pindependentforum.com/post/31818No system is perfect but I think this would be an excellent starting point, that is not too hard (IMHO) to implement or use. I don't know if it would be sufficient to provide enough opportunities for HNW investors like samford71, or whether their needs require the re-introduction of shadow-bidding. That would probably depend on deal-flow, and the number of new investors entering the market and hopefully providing demand for previous loans.
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Personally as somebody who is in the "HNW" category, I don't actually find the new system works well at all. The AC strategy is clearly to focus on a barbell of big investors (misnamed underwriters), deploying six figures into a single loan or small retail investors. This does somewhat squeeze out somebody like myself who wants a well diversified portfolio of loans in the £10k territory.
