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Post by Ace on Jan 3, 2023 8:21:57 GMT
An interesting concept starfished . Discussing what a sensible capital loss assumption is for each platform probably warrants a whole thread of its own, but here's a couple of points that jump out at me: If I've understood you correctly, for many of your platforms your assuming a capital loss equivalent to around 2 year's interest. So you'd need to invest for 2 years before you start to show a profit! Is it really worth investing in them at all if you're that pessimistic? You seem to be assuming the same loss rate on ABLrate (a high risk platform in wind-down that has already had some losses) as for Loanpad (largely recognised as the lowest risk platform out there)! And that losses on EM and CP, neither of which have declared any losses to date, will be even higher! I guess that I must have misunderstood. EM - Elfin Market? On Elfin I think losses are about 3% from tax info, but they are deducted from interest each month so you get what you see (like Zopa used to do). Fair point. I guess I was thinking more of actual losses to lenders in the form of a negative monthly payment. But you're right, there's bound to be some losses from unsecured consumer lending. A bad example on my part.
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firedog
Member of DD Central
Posts: 300
Likes: 380
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Post by firedog on Jan 3, 2023 12:38:11 GMT
Here’s my poundshop table: I’ve cheated because I’m not vigilant enough to calculate XIRRs. Instead I’ve taken my average return for each month since April and annualised it. It at least gives a decent comparison between those I’ve invested in.
Annualised return since April
10.1 Qardus Happy with this; avoided one bad loan, more due to luck than judgment.
7.0 Elfin Market Surprised how high this is: haven’t been adding new money and existing money on two-year term. Wish it was more transparent.
5.0 CrowdProperty Disappointing: CP is my biggest investment by volume and I’d have expected my rate to be higher given that I’ve been in CP for three full years and haven’t added any new funds this year; reducing my standard account now.
4.5 Loanpad A steady performer, just as you’d expect. I reduced my balance in the early part of the year for diversification, but now adding again. Far better value IMO than CP given liquidity.
4.2 Assetz Exchange New in May 2022. Predictable monthly returns since (nominal capital value has decreased very slightly, not reflected in return). I really like the concept.
3.1 Unbolted New in May 2022. Took a while to get fully invested, but ticking along now. Will add in 2023.
0.9 Kuflink New in May 2022. Almost all bullet loans, hence the low return as yet. Prefer this to CrowdProperty now (quicker to earn interest; secondary market has worked well both for buying and selling; seem more responsive to retail market)
- CapitalRise (new June 22), CapitalStackers (new Nov 22), Proplend (new Oct/Nov 22), AxiaFunder (new May 22) No returns yet
I have to say I’ve enjoyed my P2P investing this year. Not just because it’s enjoyed better returns than equities (which make up the bulk of my investments), but I take interest in the stories: seeing what I’m investing in. Risk aside – and I know it shouldn’t be aside – putting money, say, into an Assetz Exchange property that houses folk with learning disabilities feels more rewarding than stuffing it into a building society 90-day account.
Started the year invested in 5 P2P companies; ended it in 11.
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bugs4me
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Post by bugs4me on Jan 3, 2023 13:35:14 GMT
<snip> Any platforms still trading require careful monitoring and I advise a safety first approach at the first sign of trouble. However it may be that you started after the cowboys had been eliminated and all current platforms are more secure. For your sake I hope so. Couldn't agree more and it was when one of the (possibly ex) admins on here suggested in addition to DD on the loan offerings, you also did DD on the platforms themselves that my eyes were 'truly opened'. Not difficult DD but many platform directors had a string of other companies under their belt with a fair few falling into the dissolved column after just a year or two.
Appreciate past performance etc, etc but I prefer to see that my hard earned cash is as secure as possible especially as it's now fully understood that the FCA are about as useless as a chocolate teapot.
The problem today is the risk/reward simply is not there especially with rising interest rates. Ten platforms - £200 invested equally at (the old) 12% equates to £240pa. If you loose one - all £200 then at least you're still ahead (slightly). At 6% then loose one and you're £80 down. Appreciate that's simple arithmetic but bearing in mind the only safeguards in place are the integrity of the platform owners, their ability to chase bad debts (a moot point especially as it's not their money they're recovering) although they will default but not write-off/crystallise the loan to protect the PF (assuming it does exist).
I'm sure many of the defunct platforms started with the best intentions but the greed, cutting corners regarding DD, lack of disclosure to potential lenders, etc has resulted in their actions affecting investors health, future retirement plans, etc - not that they care one hoot. So it's not surprising that many early investors got out when they did and will not be returning as things stand today.
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Post by Ace on Jan 3, 2023 14:52:22 GMT
5.0 CrowdProperty Disappointing: CP is my biggest investment by volume and I’d have expected my rate to be higher given that I’ve been in CP for three full years and haven’t added any new funds this year; reducing my standard account now. I wouldn't worry about the fact that returns from CP appear to be lower than you expect. It's just an artifact of the way they work. You will be earning the stated rates, but the fact that many investments don't pay the accrued interest to the end of the loans will mean that the calculated return will appear to be low until you've fully exited. The loans on CP will be earning a higher return than the first charge loans on Kuflink, assuming that CP don't continue reducing their average rates, and assuming no losses on either platform. I started an experiment to prove it in this thread: p2pindependentforum.com/post/451845/thread.
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Post by overthehill on Jan 3, 2023 16:00:24 GMT
<snip> Any platforms still trading require careful monitoring and I advise a safety first approach at the first sign of trouble. However it may be that you started after the cowboys had been eliminated and all current platforms are more secure. For your sake I hope so. Couldn't agree more and it was when one of the (possibly ex) admins on here suggested in addition to DD on the loan offerings, you also did DD on the platforms themselves that my eyes were 'truly opened'. Not difficult DD but many platform directors had a string of other companies under their belt with a fair few falling into the dissolved column after just a year or two.
Appreciate past performance etc, etc but I prefer to see that my hard earned cash is as secure as possible especially as it's now fully understood that the FCA are about as useless as a chocolate teapot.
The problem today is the risk/reward simply is not there especially with rising interest rates. Ten platforms - £200 invested equally at (the old) 12% equates to £240pa. If you loose one - all £200 then at least you're still ahead (slightly). At 6% then loose one and you're £80 down. Appreciate that's simple arithmetic but bearing in mind the only safeguards in place are the integrity of the platform owners, their ability to chase bad debts (a moot point especially as it's not their money they're recovering) although they will default but not write-off/crystallise the loan to protect the PF (assuming it does exist).
I'm sure many of the defunct platforms started with the best intentions but the greed, cutting corners regarding DD, lack of disclosure to potential lenders, etc has resulted in their actions affecting investors health, future retirement plans, etc - not that they care one hoot. So it's not surprising that many early investors got out when they did and will not be returning as things stand today.
'FCA are about as useless as a chocolate teapot' is a bit harsh on the chocolate teapot, at least it provides 4 delicious cups of hot chocolate.
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Post by Ace on Jan 3, 2023 17:23:53 GMT
<snip> Any platforms still trading require careful monitoring and I advise a safety first approach at the first sign of trouble. However it may be that you started after the cowboys had been eliminated and all current platforms are more secure. For your sake I hope so. The problem today is the risk/reward simply is not there especially with rising interest rates. Ten platforms - £200 invested equally at (the old) 12% equates to £240pa. If you loose one - all £200 then at least you're still ahead (slightly). At 6% then loose one and you're £80 down. Appreciate that's simple arithmetic but bearing in mind the only safeguards in place are the integrity of the platform owners, their ability to chase bad debts (a moot point especially as it's not their money they're recovering) although they will default but not write-off/crystallise the loan to protect the PF (assuming it does exist). That's one heck of a pessimistic view of the current state of the industry. It effectively assumes a total loss of capital of 1 in 10 loans. I agree that I certainly wouldn't be investing in P2P if the stats were within a country mile of being that bad. To put it in context, the total stats from 4 popular platforms (Loanpad, CrowdProperty, Kuflink and Proplend) have lent a combined total of £841m over 1719 loans with £482m already repaid. Between them, they have, so far, declared a grand total of £311 of losses, or roughly 0.000,000,65% of the capital returned. These may be too optimistic in that there may be further losses that have yet to be declared, but the chances of it rising to 10% of invested capital is vanishingly small IMO.
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angrysaveruk
Member of DD Central
binomial
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Post by angrysaveruk on Jan 3, 2023 17:37:21 GMT
<snip> Any platforms still trading require careful monitoring and I advise a safety first approach at the first sign of trouble. However it may be that you started after the cowboys had been eliminated and all current platforms are more secure. For your sake I hope so. Couldn't agree more and it was when one of the (possibly ex) admins on here suggested in addition to DD on the loan offerings, you also did DD on the platforms themselves that my eyes were 'truly opened'. Not difficult DD but many platform directors had a string of other companies under their belt with a fair few falling into the dissolved column after just a year or two.
I know someone from the Private Equity world who knew one of the founders of a fairly well known P2P platform. Basically this individual had a very tarnished reputation and had lost alot of other peoples money in the City, didnt stop him setting up a fairly well known P2P platform (which later went bust).
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firedog
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Post by firedog on Jan 3, 2023 17:55:57 GMT
5.0 CrowdProperty Disappointing: CP is my biggest investment by volume and I’d have expected my rate to be higher given that I’ve been in CP for three full years and haven’t added any new funds this year; reducing my standard account now. I wouldn't worry about the fact that returns from CP appear to be lower than you expect. It's just an artifact of the way they work. You will be earning the stated rates, but the fact that many investments don't pay the accrued interest to the end of the loans will mean that the calculated return will appear to be low until you've fully exited. The loans on CP will be earning a higher return than the first charge loans on Kuflink, assuming that CP don't continue reducing their average rates, and assuming no losses on either platform. I started an experiment to prove it in this thread: p2pindependentforum.com/post/451845/thread. Yes, understood. It's just that I'd have thought that after three years, with no significant new investment this year, my trailing returns would begin to reflect the advertised returns. My very first investment (an 18 month loan which I pledged to in Nov 19) still hasn't repaid. On the one hand, when it does this would make my return look better, on the other hand, with, say, Kuflink, I'd could have got rid of that loan rather than being locked in it. It's not a deal-breaker, I'm probably more frosty to CP given their increasing lukewarm approach to retail customers.
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Post by Ace on Jan 3, 2023 18:15:39 GMT
I wouldn't worry about the fact that returns from CP appear to be lower than you expect. It's just an artifact of the way they work. You will be earning the stated rates, but the fact that many investments don't pay the accrued interest to the end of the loans will mean that the calculated return will appear to be low until you've fully exited. The loans on CP will be earning a higher return than the first charge loans on Kuflink, assuming that CP don't continue reducing their average rates, and assuming no losses on either platform. I started an experiment to prove it in this thread: p2pindependentforum.com/post/451845/thread. Yes, understood. It's just that I'd have thought that after three years, with no significant new investment this year, my trailing returns would begin to reflect the advertised returns. My very first investment (an 18 month loan which I pledged to in Nov 19) still hasn't repaid. On the one hand, when it does this would make my return look better, on the other hand, with, say, Kuflink, I'd could have got rid of that loan rather than being locked in it. It's not a deal-breaker, I'm probably more frosty to CP given their increasing lukewarm approach to retail customers. Yes, I agree with your 'lukewarm' comment. I have funds stuck in that same loan. On the bright side, we're owed 19 months penalty interest at 10% pa. If it pays in full, it will give a substantial boost. You would only have been able to sell it on Kuflink if you had done so before it was 1 month from its scheduled end date. Once it was a month from it's repayment date, any whenever it is in default, it is barred from the SM.
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dave4
Member of DD Central
Cynical is a hobby not a lifestyle
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Post by dave4 on Jan 3, 2023 19:24:20 GMT
My 2022 to 2023 in P2P
Alphabetical order... Ablerate. Reduced my exposure as was getting a bit nervous with the world in turmoil, a few months later ABL shut up shop, only ever in the P1,AF, and Scottish loans. If (fingers crossed) P1 and AF pay out (and Scottish don't and i suspect it wont as time goes on) then loosing about 25% of my total investment. Hoping to break even ish, did quite well /lucky on buying and selling on the secondary market. Assets Capital. Got out of 90 day and withdrew 90% of funds, invested the remaining 10% into the manual (mainly bought at discount). Reduced manual account throughout the year as loans repaid, sold out of and hi risk loans, had a feeling the Manual account would be next to be locked in. Got locked in (bugger), but with hopefully some solid repaying loans. If It all goes well then i will have done ok, if all goes wrong only loose about 25% of my all time interest. Have less then a 10th of my total all time hi funds on platform. PS always new assets would screw over loan investors, to please equity investors and shareholders. Assets Exchange. Only ever invested token amounts in loans, then sold off half for a small profit. The remaining half will run there course probably. I like the idea of the properties but the rewards are too low and depend on equity uplift, which may not happen (the world is just to unstable at the moment and for the forseeable). Also SL having his fingers in the pie has always been an uneasy bedfellow, even more sow now. Think its time to consider pulling out, maybe? Axia Funder. I like this, always have, even more sow now loans have started to repay, My AC funds found a home here. plan is to increase. Blend. Autolend is a pain in ass, but managed to fund a few loans throughout the year. Plan to increase funds as autolend allows. (expecting the pile of awaiting cast to reduced in 2023 so should help things). Connective Lending. A very pleasant but all to brief encounter. Sadly shut up shop. Crowd property. Steadily increased throughout the year, Stood aside after the initial investment in all multi tranche / phase loans. Currently disappointing in customer service, there website and reports system. Probably just reinvest repayments of capital and withdraw interest, or/ and maybe reduce my £££ a little. CP capital. Was initially interested, as i do believe Cp do there loan homework well enough to make 2nd charge lending viable, but not well enough for current world issues. Will keep an eye on offerings but would have to be something very special to tempt me. Capital Rise. Increased my exposure throughout the year. AC funds found a home here. Plan to keep increasing in 2023. Capital Stackers. New platform funded in 2022. Having been signed up for 3 years carefully watching and evaluating, took the decision to cautiously invest this year. 2nd charge lending but with 4 risk profiles, im sticking to the safer end of the scale, and selecting my loans carefully. Despite the world issues continuing. Kufflink. Very Happy with Kuff, plan to reinvest repayments and remove some or all interest. Usually invest in lower risk (A) loans usually happy to go full term, despite the current term overruns. Sold a few on the SM as they approach near term end. Have started to move towards monthly repayments as apposed to full term, mainly because of world issues. Has become practically self funding, and i expect to be fully self funding early spring. LandLord Invest. New platform for 2022. Watched for about 2 years, decided to invest funds from AC. Very happy, only plan on 1st charge loans, but not ruling out the 2nd charge offerings. Plan to increase throughout 2023. and become self funding in 2024 ish Loan Pad. Very happy, have rolling weekly withdraws set up from the premium account, also have opened an isa account for the 2022 /2023 tax year, which i plan on keeping open in 2023/2024. Current Plan to exit the non isa account in April. Proplend. Very happy so far, use the auto invest facility. Yes 2.0 is not perfect but serves my purpose. Stepped aside from a couple of loans this year, was hoping for more from the VAT loans.Plan is to steadily increase throughout the year. Probably stick to safer A loans with the odd B. Starting to become self funding, so only requiring the odd ££ top up Nester. New platform for 2022. Property secured lending. Found through this forum. Initially went in very very hard ( had a lot of AC ££ needing a home at the time ). Initial loans have repaid (early) and have reduced my exposure considerably, have diversified my remaining platform funds over most of the current loans. Qardus SME lending, was very keen in the past taking full advantage of the Q boost ect, still am keen on the platform, but with the world issues at present, unsecured lending is just not for me at present, decided to withdraw, had my first loan default (expecting a total loss in the loan funds) withdrawing all repaying capital and will only invest repaid dividend/ interest. Shojin. property backed 2nd charge (mezzanine) lending, Very happy with this platform, intend to increase my exposure throughout 2023 if suitable loans become available. Should become self funding by year end. Unbolted. New for 2023, Connected lending funds found a home here, cash drag is an issue, but just top up occasionally and it keeps on churning away. Plan to increase my exposure throughout 2023 (probably with Qardus capital repayments).
Over the 2023 year (the current plan is) i intend to reduce my P2P exposure by 20% to 25%, and these funds will find a home in fscs protected easy and 1 year access accounts, and / or stocks if i feel appropriate. Move From Loan pad standard to loan pad isa. Possibly start funding loans on somo and lendinvest (have not funded because not strictly p2p and this takes them out of any P2P tax loss benefits), But there performance in the past is impressive, a lough interest rates have been a little low, but are now rising.
The future.....P2P. I see the cash mountains at the entry door that platforms have enjoyed over the last 2/3/years diminishing. Infact its already started and many platforms that i use or watch have loans that not fully funded. Now the outcome of this is not easy to predict. AC locked retail funds in and went with institutional ££. Other platforms may do similar, I suspect some are already well down this path, (which is not a bad thing if they take us retail lenders with them, some may have to increase lender rewards at the expense of there profit margins, or loan quality (AC may or may not have gone down this rout of lend volume over quality, knowing that a lock in is in the future, Who knows?? not me) Some have increased there borrower rates, some have already introduced a flexible borrower rate.
The trick i am hoping to pull of is to stick with the platforms that will survive, a good understanding of the market (especially the 2nd charge/ mezz platforms, good communication, and a good reputation. Preferably with skin in the game.
Ps always remember P2P lends to the less favorable opportunities, after the institutions have cherry picked.
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starfished
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Post by starfished on Jan 3, 2023 20:01:10 GMT
An interesting concept starfished . Discussing what a sensible capital loss assumption is for each platform probably warrants a whole thread of its own, but here's a couple of points that jump out at me: If I've understood you correctly, for many of your platforms your assuming a capital loss equivalent to around 2 year's interest. So you'd need to invest for 2 years before you start to show a profit! Is it really worth investing in them at all if you're that pessimistic? You seem to be assuming the same loss rate on ABLrate (a high risk platform in wind-down that has already had some losses) as for Loanpad (largely recognised as the lowest risk platform out there)! And that losses on EM and CP, neither of which have declared any losses to date, will be even higher! I guess that I must have misunderstood. No I think you have understood perfectly! My only comment is that the risk reduction factor is trying to pick up more than just losses on individual loans but also something for generic "platform risk". The two years proxy more forces me to think longer term and not get overexcited about early gains and also later losses. I think my emotional response to some losses has been more muted compared to others because to some extent they were anticipated. Which brings us to your second point about it being worth it. On purely financial grounds. No. But I do (still) enjoy the other things that come with P2P for now. On ABLrate that is a very fair challenge. That 10% hasn't been revisited for over 2 years and their business model has changed significantly since then. I'll revise that up to 15% (note the average rate will apply to ALL P2P balances not just ABLrate). On Loanpad, even in the early days, I think I have always had an irrational suspicion of property loans (and business loans). Which is why I see it more risky than pawn type loans from unbolted. Despite the positive noise on Loanpad I can't bring myself to give it a 5% rating (after Zopa no one else has managed a 0% rating). CP has a higher rating than Loanpad purely as a consequence of there being more negative noise on the boards about how they operate. Sadly operational deficiencies can be an indicator of future issues. Not necessarily due to malicious intent but just a business having too much on its plate so things can get missed/problems magnify. Elfin market is very new to me and also very opaque. After a year or two I probably will bring that down to something similar to Loanpad.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jan 3, 2023 21:16:51 GMT
Ironically I would trust platforms more if they had declared more losses, since I know that they are kicking some cans down the road and simply deferring the evil day, but I don't know to what extent. Any lack of transparency is a red flag for me. According to your figures those platforms have £359,000,000 outstanding and almost by definition this will include all the loans which will not repay in full. So I can envisage £36,000,000 being lost to investors just as easily as zero, or any other figure. We simply don't know, which makes investment more of a gamble.
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Post by Ace on Jan 4, 2023 0:11:11 GMT
Ironically I would trust platforms more if they had declared more losses, since I know that they are kicking some cans down the road and simply deferring the evil day, but I don't know to what extent. Any lack of transparency is a red flag for me. According to your figures those platforms have £359,000,000 outstanding and almost by definition this will include all the loans which will not repay in full. So I can envisage £36,000,000 being lost to investors just as easily as zero, or any other figure. We simply don't know, which makes investment more of a gamble. I completely take your point that we don't really know what percentage of the outstanding loans are in the can kicking territory, and that the non-repaid loans could contain a large rump of potential losses. So, I've tried to get some measure of it from the platforms' statistics. I'm going with the amount of capital that's more that 180 days late (FCA definition of a default) as my definition of the loans that are in a 'can kicking' state (I expect this to be an over estimate, as some of those will be late for valid reasons). Unfortunately, this info isn't readily available. So, I've had to read between the lines a bit in order to estimate these percentages. Anyway these are the estimates I've come up with for those platforms previously mentioned: Proplend: 2.8% of outstanding loans are in default. CrowdProperty: 9% of outstanding loans are in default. Kuflink: 1.1% of outstanding loans are in default. Loanpad: I couldn't come up with an easy way to estimate, but this platform has to be the least likely to suffer losses of 10% of capital across the board, given that the average LTVs are only 40%. Even for the worst case out of those at 9% of loans being in 'can kicking' mode, all of the capital in those loans and more would need to be lost to get to the assumed 10% loss figure. Since they are all first charges, that's 14+ loans that all need to result in a complete capital loss. I can accept that some of those loans might result in some degree of loss, but it seems to me that it's extremely unlikely that they would all result in a total loss. This view is further supported by the fact that there have been zero capital or even any interest losses among the 13 loans that have previously been in that 'can kicking' state and have since resolved. Personally, I see CP's estimate of 1% losses to be much closer to the mark, especially if we add the other platforms into the mix.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jan 4, 2023 10:01:10 GMT
Ironically I would trust platforms more if they had declared more losses, since I know that they are kicking some cans down the road and simply deferring the evil day, but I don't know to what extent. Any lack of transparency is a red flag for me. According to your figures those platforms have £359,000,000 outstanding and almost by definition this will include all the loans which will not repay in full. So I can envisage £36,000,000 being lost to investors just as easily as zero, or any other figure. We simply don't know, which makes investment more of a gamble. I completely take your point that we don't really know what percentage of the outstanding loans are in the can kicking territory, and that the non-repaid loans could contain a large rump of potential losses. So, I've tried to get some measure of it from the platforms' statistics. I'm going with the amount of capital that's more that 180 days late (FCA definition of a default) as my definition of the loans that are in a 'can kicking' state (I expect this to be an over estimate, as some of those will be late for valid reasons). Unfortunately, this info isn't readily available. So, I've had to read between the lines a bit in order to estimate these percentages. Anyway these are the estimates I've come up with for those platforms previously mentioned: Proplend: 2.8% of outstanding loans are in default. CrowdProperty: 9% of outstanding loans are in default. Kuflink: 1.1% of outstanding loans are in default. Loanpad: I couldn't come up with an easy way to estimate, but this platform has to be the least likely to suffer losses of 10% of capital across the board, given that the average LTVs are only 40%. Even for the worst case out of those at 9% of loans being in 'can kicking' mode, all of the capital in those loans and more would need to be lost to get to the assumed 10% loss figure. Since they are all first charges, that's 14+ loans that all need to result in a complete capital loss. I can accept that some of those loans might result in some degree of loss, but it seems to me that it's extremely unlikely that they would all result in a total loss. This view is further supported by the fact that there have been zero capital or even any interest losses among the 13 loans that have previously been in that 'can kicking' state and have since resolved. Personally, I see CP's estimate of 1% losses to be much closer to the mark, especially if we add the other platforms into the mix. You may be right. I hope so. However the history of p2p is littered with examples of platforms which were the investors' darlings one minute and in trouble the next, due to lack of transparency and hiding non-performing loan data for fear of frightening lenders. So I think a constant reminder of the risks is called for. Like any risky investment where the risk is properly priced into the return most investors will probably make a better return than they could get from a risk free account, but some will lose big. Don't invest more than you can afford to lose.
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bugs4me
Member of DD Central
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Post by bugs4me on Jan 4, 2023 10:02:30 GMT
Ironically I would trust platforms more if they had declared more losses, since I know that they are kicking some cans down the road and simply deferring the evil day, but I don't know to what extent. Any lack of transparency is a red flag for me. According to your figures those platforms have £359,000,000 outstanding and almost by definition this will include all the loans which will not repay in full. So I can envisage £36,000,000 being lost to investors just as easily as zero, or any other figure. We simply don't know, which makes investment more of a gamble. I completely take your point that we don't really know what percentage of the outstanding loans are in the can kicking territory, and that the non-repaid loans could contain a large rump of potential losses. So, I've tried to get some measure of it from the platforms' statistics. I'm going with the amount of capital that's more that 180 days late (FCA definition of a default) as my definition of the loans that are in a 'can kicking' state (I expect this to be an over estimate, as some of those will be late for valid reasons). Unfortunately, this info isn't readily available. So, I've had to read between the lines a bit in order to estimate these percentages. Anyway these are the estimates I've come up with for those platforms previously mentioned: Proplend: 2.8% of outstanding loans are in default. CrowdProperty: 9% of outstanding loans are in default. Kuflink: 1.1% of outstanding loans are in default. Loanpad: I couldn't come up with an easy way to estimate, but this platform has to be the least likely to suffer losses of 10% of capital across the board, given that the average LTVs are only 40%. Even for the worst case out of those at 9% of loans being in 'can kicking' mode, all of the capital in those loans and more would need to be lost to get to the assumed 10% loss figure. Since they are all first charges, that's 14+ loans that all need to result in a complete capital loss. I can accept that some of those loans might result in some degree of loss, but it seems to me that it's extremely unlikely that they would all result in a total loss. This view is further supported by the fact that there have been zero capital or even any interest losses among the 13 loans that have previously been in that 'can kicking' state and have since resolved. Personally, I see CP's estimate of 1% losses to be much closer to the mark, especially if we add the other platforms into the mix. It's extremely unfortunate that the FCA have failed to get to get to grips with the P2P sector and whilst 180 days may be their definition of a default there's no requirement for the platform to apply it. Can-kicking has become an Olympic sport in P2P land although as the FCA have led the way in this I'd award them the gold medal!!
I always recall how MT were top of the poll when it was live on the forum a while back. Then a couple of years later they went from hero to villain. At the time as MT had decided to run their own loan book off themselves I wrote anything outstanding down to 50p. Once administrators got involved it was written down to 1p and I doubt if I'll see any of those even though at least one zombie loan has paid in full. There's always something (convenient) that stops administrators from distributing lenders funds back to where they rightfully belong. Is it me just being cynical that whilst there's money in the bucket to charge their fees against that's stopping them - oh, surely not.
But an interesting discussion as to how forumites view and calculate their XIRR (or otherwise) returns. I still hold the belief that we've seen the best of P2P days, others disagree and if you can make the market work to your satisfaction then that's great. It's just not for me though at the moment but who knows, just maybe a fully transparent platform will pop up one day.
Ace - thanks again for starting the thread and I hope you continue publishing your P2P results and thoughts. I've found your thoughts/views and those of others extremely interesting. I'll certainly continue reading this thread with interest in the future.
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