tallsuk
Member of DD Central
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Post by tallsuk on Feb 20, 2022 20:23:58 GMT
KUF have recently allowed investors to look at the full breakdown of the Auto Invest loan book. I have had a look through and tried to do a basic analysis and wanted to share the parts I liked as well as the parts I am not so keen on. These are of course personal opinions and others may take different views.
There are 168 individual loans and all are marked as performing.
I have an equal percentage of the investment that is very small, 0.0x which suggest a lot of diversifications. The % is the same for both investments.
Most of the loans (146) are for less than £500k.
Most of the loans (153) have less than 2.5% of my overall investment, 150 have less than 2%, 132 have less than 1% and 108 have less than 0.5%.
The largest loan is almost 10% of my investment. The largest three take almost 20% and the top 5 take over 25%. This is a far higher level of exposure than I feel happy with. The largest loan is £3m+ and second and third are £1.5m which explains why there is an equal percentage for all loans, yet drastically different values.
Of the 168 individual loans there are only 83 projects with only 53 of them having a single investment. There are 10 projects with 4 or more traches with each tranche classed as an individual loan. Some of the 53 with only one loan may be at early stages of the project and therefore will have additional drawdowns to come.
The largest project has over 10% of the investment, and the largest 5 each have at least 4.5%.
I did not go through the whole list, but it looks as if all the investments in auto are also available on self-invest, although not all on self-invest are part of auto. Although auto often has various tranches, it does not look as if they are in every tranche. They don’t list what tier auto is invested in.
Overall, I feel that advertising 168 loans is somewhat disingenuous. Additionally, I am not keen on the fact that there is considerable exposure to a small number of loans.
As auto invest pays up to 5%, 6% and 7% on a 1, 3 or 5 year basis, I am not sure that these rates justify the exposure for anyone who takes an active interest in P2P. They are clearly aimed at very hands off investors who are happy to set and forget.
It is important to recognise that they don’t give LTV or any info on the security that the loans are exposed to. It may well be the case that they are only exposed to the first part of any loan and therefore have far lower risk than the self-select elements. However, going forward, I personally will be focusing on the self-select options.
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Post by Ace on Feb 20, 2022 23:06:06 GMT
Thanks for analysing. A large step forward for Kuflink.
I assume you're basing your "all are marked as performing" on the fact that the "DEFAULT LOANS" tab is empty. However, if you click the "loan updates" link on the largest loan (both tranches) it says that the loan is in default! I haven't looked at any others, but it would be an amazing coincidence if this was the only one.
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easynow
Member of DD Central
Popcorn anyone?
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Post by easynow on Feb 21, 2022 8:25:22 GMT
That's nowhere near as bad as "easy money".
Analysing one of my accounts:
40.05% of my cash is in one loan,
Widen that up a little and 95.1% is across my largest 4 loans.
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Post by overthehill on Feb 21, 2022 10:32:48 GMT
That's nowhere near as bad as "easy money". Analysing one of my accounts: 40.05% of my cash is in one loan, Widen that up a little and 95.1% is across my largest 4 loans.
Who would invest in a company called EasyMoney? Even if they are bound by the Easy brand.
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easynow
Member of DD Central
Popcorn anyone?
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Post by easynow on Feb 21, 2022 13:52:02 GMT
That's nowhere near as bad as "easy money". Analysing one of my accounts: 40.05% of my cash is in one loan, Widen that up a little and 95.1% is across my largest 4 loans.
Who would invest in a company called EasyMoney? Even if they are bound by the Easy brand.
I'm not sure what your point is, care to elaborate?
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Nomad
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Post by Nomad on Feb 21, 2022 15:32:42 GMT
Who would invest in a company called EasyMoney? Even if they are bound by the Easy brand.
Me.
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p2pfan
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Full-Time Investor
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Post by p2pfan on Feb 21, 2022 18:30:03 GMT
Thanks for analysing. A large step forward for Kuflink. I assume you're basing your "all are marked as performing" on the fact that the "DEFAULT LOANS" tab is empty. However, if you click the "loan updates" link on the largest loan (both tranches) it says that the loan is in default! I haven't looked at any others, but it would be an amazing coincidence if this was the only one. Firstly, thank you for the appraisal tallsuk. It is insightful. This openness by Kuflink is to be highly welcomed and they deserve a pat on the back for it. In my case, the weighting towards specific loans does not seem to be as pronounced as yours. Must be because we dived into the Auto-Invest product at different times. What is concerning, is the number of default and overdue loans. When one clicks on 'Loan Updates', a lot of them are overdue and, for instance, one I just randomly looked at (Loan 730) is showing with the following status: "The loan has gone into default, and we will provide a further update as soon as a way forward is agreed." What would be true transparency is showing how many loans haven't paid by their redemption dates, by how long they are overdue etc. etc. But hardly any P2P platform provides these figures in a bona fide way (for instance, they keep extending loans again and again so as to not have to declare them as in default), as they pretend to look better than they are in order to win new lenders.
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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 Feb 21, 2022 18:45:58 GMT
I wonder whether it is necessary to comply with FCA regulation ... rules are less strict for platform selected portfolio but there are still some disclosure elements. Dont have access to assess though I find it interesting that several platforms have increased information available recently.
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tallsuk
Member of DD Central
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Post by tallsuk on Feb 21, 2022 19:17:09 GMT
Thanks for analysing. A large step forward for Kuflink. I assume you're basing your "all are marked as performing" on the fact that the "DEFAULT LOANS" tab is empty. However, if you click the "loan updates" link on the largest loan (both tranches) it says that the loan is in default! I haven't looked at any others, but it would be an amazing coincidence if this was the only one. Very interesting point that you made Ace. All loans are marked as performing in the spreadsheet that was downloaded. I hope this means that they weren't but are now although I have nothing apart from the sheet to back that up. I hope the updates are just out of date. The analysis above all came from the spreadsheet but Ace flagged up a seperate list with a bit more information. From that I calculated the LTVs of each loan and project. Overall, the LTV is 34%, however there are 2 outliers with LTV's of less than 1% (I assume they are about to finish). Once these are removed the overall LTV is 60% which I think is very respectable. I was a bit surprised to see the second charges and eqitable charges as I am not a big fan of them and expect a very high rate of return to make them worthwhile. The breakdown is 148 first charge, 8 second charge and 4 equitable charge with over 90% of cash invested having a first charge. I actually think this is quite reasonable. I was less happy to see that of the total lent to these 12 non-first charge loans, 63% was in only 3 but I am happy to give the benefit of the doubt to Kuflink. Overall, based on the information provided, I am quite happy with the structure of the loanbook although the three loans marked as defaulting in the updates are of concern. With a 60% LTV and the vast majority of first charge loans I think that autolend as set and forget is reasonable although the rates are probably too low for me going forward as I am happy to spend time looking for better deals.
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tallsuk
Member of DD Central
Posts: 142
Likes: 125
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Post by tallsuk on Feb 21, 2022 19:24:59 GMT
Thanks for analysing. A large step forward for Kuflink. I assume you're basing your "all are marked as performing" on the fact that the "DEFAULT LOANS" tab is empty. However, if you click the "loan updates" link on the largest loan (both tranches) it says that the loan is in default! I haven't looked at any others, but it would be an amazing coincidence if this was the only one. Firstly, thank you for the appraisal tallsuk . It is insightful. This openness by Kuflink is to be highly welcomed and they deserve a pat on the back for it. In my case, the weighting towards specific loans does not seem to be as pronounced as yours. Must be because we dived into the Auto-Invest product at different times. What is concerning, is the number of default and overdue loans. When one clicks on 'Loan Updates', a lot of them are overdue and, for instance, one I just randomly looked at (Loan 730) is showing with the following status: "The loan has gone into default, and we will provide a further update as soon as a way forward is agreed." What would be true transparency is showing how many loans haven't paid by their redemption dates, by how long they are overdue etc. etc. But hardly any P2P platform provides these figures in a bona fide way (for instance, they keep extending loans again and again so as to not have to declare them as in default), as they pretend to look better than they are in order to win new lenders. I think time will erode some of the weightings as the book turns over but I think most of the detail is still relevant. I can only see two loans marked as default, both mentioned in this thread, but there are lots that have extensions etc. I am not sure this is to win over new lenders though. I think that whilst it is a regular enough occurance there is probably even more than normal due to market conditions. I think it is something that we as lenders should be able to monitor more easily though, as you say, and Kuflink (as well as many others) dont make this very easy.
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Post by df on Feb 21, 2022 22:44:05 GMT
KUF have recently allowed investors to look at the full breakdown of the Auto Invest loan book. I have had a look through and tried to do a basic analysis and wanted to share the parts I liked as well as the parts I am not so keen on. These are of course personal opinions and others may take different views. There are 168 individual loans and all are marked as performing. I have an equal percentage of the investment that is very small, 0.0x which suggest a lot of diversifications. The % is the same for both investments. Most of the loans (146) are for less than £500k. Most of the loans (153) have less than 2.5% of my overall investment, 150 have less than 2%, 132 have less than 1% and 108 have less than 0.5%. The largest loan is almost 10% of my investment. The largest three take almost 20% and the top 5 take over 25%. This is a far higher level of exposure than I feel happy with. The largest loan is £3m+ and second and third are £1.5m which explains why there is an equal percentage for all loans, yet drastically different values. Of the 168 individual loans there are only 83 projects with only 53 of them having a single investment. There are 10 projects with 4 or more traches with each tranche classed as an individual loan. Some of the 53 with only one loan may be at early stages of the project and therefore will have additional drawdowns to come. The largest project has over 10% of the investment, and the largest 5 each have at least 4.5%. I did not go through the whole list, but it looks as if all the investments in auto are also available on self-invest, although not all on self-invest are part of auto. Although auto often has various tranches, it does not look as if they are in every tranche. They don’t list what tier auto is invested in. Overall, I feel that advertising 168 loans is somewhat disingenuous. Additionally, I am not keen on the fact that there is considerable exposure to a small number of loans. As auto invest pays up to 5%, 6% and 7% on a 1, 3 or 5 year basis, I am not sure that these rates justify the exposure for anyone who takes an active interest in P2P. They are clearly aimed at very hands off investors who are happy to set and forget. It is important to recognise that they don’t give LTV or any info on the security that the loans are exposed to. It may well be the case that they are only exposed to the first part of any loan and therefore have far lower risk than the self-select elements. However, going forward, I personally will be focusing on the self-select options. Your figures suggest that the exposure to an individual loan or borrower is much higher. It looks as they count multiple tranches and tiers as separate loans.
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qwakuk
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Post by qwakuk on Feb 22, 2022 9:52:31 GMT
Thank you for spotting that this data was now available, downloaded and had a quick look
9.82% holding is my largest and appears in both 5 year ISAs with exactly the same percentage ?
Will delve a bit further when I have time
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Post by Ace on Feb 22, 2022 10:28:08 GMT
Thank you for spotting that this data was now available, downloaded and had a quick look 9.82% holding is my largest and appears in both 5 year ISAs with exactly the same percentage ? Will delve a bit further when I have time I think you may have missed the fact that there are 2 tranches of your largest loan. The second tranche takes your exposure to ~10.2%.
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qwakuk
Member of DD Central
Posts: 236
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Post by qwakuk on Feb 22, 2022 11:51:10 GMT
Thank you for spotting that this data was now available, downloaded and had a quick look 9.82% holding is my largest and appears in both 5 year ISAs with exactly the same percentage ? Will delve a bit further when I have time I think you may have missed the fact that there are 2 tranches of your largest loan. The second tranche takes your exposure to ~10.2%. As always you are right, I had just done a max calc on the % column within excel and had not looked any deeper
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Post by jono75 on Mar 4, 2022 9:48:50 GMT
Hope everyone is well. It's great that Kuflink have added this breakdown, but it seems to have some teething troubles, at least for me. The breakdown (not downloaded one) only seems to show details for first loan and if you click it says can't get loan details and hangs.
I'm sure they will fix that. Like you, five loans make up 25% of my portfolio with one at almost 10%, all say performing, I've been invested 11 months with 50/50 monetary split of three and five year, breakdown appears the same on both.
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