shimself
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Post by shimself on Jun 4, 2014 21:20:41 GMT
My suspicion is that it is "large lumpy deals"; their stats page is currently showing c. £11.5m awaiting drawdown over the next 2 weeks, and nearly £24m over the next month. The rate drop is clearly designed to slow the inflow of funds - I don't envy the fine balance that W&C have to achieve between maintaining an adequate inflow of funds and not creating an excessive overhang when loans mature given their committment to pay interest on a daily basis whether the funds are on risk or not. I'm trying to understand how that affects the risk; if our money isn't on loan then where is it and is there some chance that if Wellesley gets into difficulties that we might find some of our funds will go with them.
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Post by organum on Jun 5, 2014 9:00:13 GMT
As a newbie to this but a long standing investor this forum is very useful in getting a handle on the p2p business. Thanks to all for very useful comments, including Wellesley who is particularly straightforward AFAICS in their replies. Bonus points in my book.
There are some mysteries about the Wellesley business model including how they finance interest immediately money is deposited, however the general premise that the LTV is apparently low and all loans include company money seems prudent.
I note in particular that the current biggie is a bridging loan which means that as soon as better finance is available the loan will be repaid. This would be an awful lot of money coming back in to be loaned out again.
My one concern is that the loans are not visible to investors, unlike other platforms. This does make it difficult to judge the quality of loans since 60% LTV sounds good but is only part of the risk evaluation.
That said I have put some good five figure money in on an 18 month basis, interestingly this is also quoted as being the maximum term on their website, and we shall see. A transparent partnership between investors and the company is essential.
Finally just a point that I really like not having to micromanage my loans and also the fact that loans are secured against property. In my book directors guarantees are not etc etc.
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Post by westcountryfunder on Jun 5, 2014 9:27:37 GMT
Having dipped my big toe rather than my prior wetting of little toe only into W&C, I have to admit it is slightly disconcerting to see that only 20% of my money is 'on loan'. When coupled with announcement of rate drops would suggest that they are currently sloshing with lender money, or have a shortage of new deals on board, or have a business model which is heavily dependent on lumpy large deals rather than steady stream of small deals. My experience is that in the early days it did indeed take anything up to two weeks for money to be matched. On the other hand a tranche that I invested a few days ago was matched within a couple of days. As to the question, where is the money if it is not matched? This is covered in the FAQs: "What happens to my money whilst it is unmatched? Your money is held in a segregated client account with Lloyds Bank. It is held separate from our operating cash and in the event of operator insolvency it will not be touched." However, sometimes one's money is matched and a few days later it seems it isn't. Certainly it would be interesting to be reassured that such money also is held in the segregated client account.
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warn
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Curmudgeon
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Post by warn on Jun 5, 2014 10:53:15 GMT
...an 18 month basis, interestingly this is also quoted as being the maximum term on their website... I believe they also offer 3-, 4-, and 5-year terms.
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pikestaff
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Post by pikestaff on Jun 5, 2014 11:10:51 GMT
Having dipped my big toe rather than my prior wetting of little toe only into W&C, I have to admit it is slightly disconcerting to see that only 20% of my money is 'on loan'. When coupled with announcement of rate drops would suggest that they are currently sloshing with lender money, or have a shortage of new deals on board, or have a business model which is heavily dependent on lumpy large deals rather than steady stream of small deals. Large lumpy deals which would bust the provision fund if things went wrong, plus paying interest on funds not yet lent out, plus no transparency. Wellesley's communication may be good but I'm staying out.
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oldgrumpy
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Post by oldgrumpy on Jun 5, 2014 11:14:04 GMT
...an 18 month basis, interestingly this is also quoted as being the maximum term on their website... I believe they also offer 3-, 4-, and 5-year terms. warn I think organum meant the maximum loan available from Wellesley is 18 months, rather than the maximum investment term which as you say is 5 years.
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Post by wellesleyco on Jun 9, 2014 7:14:29 GMT
Good Morning all, Thank you for your continued participation in this forum. We appreciate the feedback and of course any concerns that you share. This forum we believe is a fantastic place to speak with you all as it is open, independent and there are no hiding places!! (I may ask for some more transparent feedback later in this post) Loan Matching
@shimselfyou are correct that there is a greater level of transparency being introduced with the new auto-matching tool. With this tool you will be re-matched on a weekly basis across our entire open loan book. The number of loans you are matched to will fluctuate as more loans draw down and others repay. The funds that you lend through Wellesley & Co are dispersed across these loans on a volume weighted basis. The information of how much money you have in each loan will be visible to lenders. As you are matched across the whole loan book it can be assumed from our lending statistics that your funds are loaned out at an average LTV of 64% secured against residential property in the UK. We employ an extremely experienced credit committee who stringently evaluate each loan and its security. The Auto-matching tool is somewhat overdue in seeing the light of day. From the initial idea we have developed the system and have been testing it over the recent weeks. I hope that you will appreciate that while it is somewhat overdue we feel that the priority is that it works, it is integrated into the current system with minimum disruption to normal service and that there are no side effects of running this system on the front end or the back end of the platform. The last thing we want to do is release something that is not ready and will cause disruption on what is the most important and sensitive part of the platform. Business Platform Risk
davee39 and shimself, please see the section on our website that lists the risk including ‘Operator Insolvency’. In short, if Wellesley & Co ceased to trade lenders funds would be: Either: Assigned to loans, in which case the security trustee would administer the repayment of these loans. (Wellesley & Co going bust does not affect a borrower’s ability to repay their loan) Or:Not matched, in which case the funds are held in a Segregated Client Money Account with Lloyds Bank. (Therefore is untouchable by administrators. This money could only be lost if Lloyds bank were to fail, this is covered up to £85,000 by the FSCS) www.wellesley.co.uk/security/what_riskswestcountryfunder whenever your funds are unmatched, the money is held in the segregated client Money Account. organum welcome to the forum, I agree that a transparent partnership between investors and the company is essential. Our maximum borrowing term is 18 months however as during your 18 month term and indeed longer terms, your funds are periodically re-matched on a volume weighted basis and therefore this is not an issue. bracknellboy & mrclondon currently we are not short of new deals or long cash. Our current marketing campaigns are maintaining a steady inflow of both. Our rates were lowered as we we would like to lend on the safest of assets at the lowest LTVs and these types of deals command the lowest interest rates. In order to lend on such deals we require a low cost of funds. This combined with increased competition as a result of improved liquidity and better economic outlook has resulted on lending rates in the property world starting to fall. It is essential that we keep our rates at a level where we are not forced to lend on higher risk assets. Naturally we will adjust our rates up or down on response to our marketplace however we do so in the interests of offering a safe place for our customer funds.. We have a steady stream of deals that come in a variety of sizes, however the lending market for property bridging/development is characteristically different to the unsecured personal loan market which has a higher volume of smaller loans. With our shareholder capital being lent out and retaining a portion of each loan, there is the ability for Wellesley & Co to be under-funded by lenders and also overly funded by lenders. As Wellesley & Co lends to borrowers in the first instance, then re-assigning the loans to lenders; If we are short Lender Cash: then Wellesley & Co retains a higher portion of every loan until the inflow picks up to release the Wellesley cash in order to make new loans. If we are long Lender Cash: we are paying interest to Lenders who’s funds are not assigned. However with our cash taking a portion of every loan, this generates interest which is able to service the interest payments to those whose funds are unmatched. pikestaff, If a loan was to default Wellesley & Co would in the first instance liquidate the security, the provision fund would be applied to if there was a shortfall in the capital recovered beyond the Wellesley & Co subordinated portion.. Interest paid on un-lent funds addresses we believe is one of the primary irritations for P2P lenders, our model allows us to address this and we believe is a strong selling point for us. oldgrumpy correct as always warn we do have 3, 4, and 5 year lending terms however our maximum borrowing term is 18 months. The type of lending that we do, participating in property bridging and development finance is characteristically short term therefore fits in this bracket. I hope this response has been helpful. Please feel free to ask any subsequent questions if I have omitted anything. TrustPilot
As I mentioned at the top of this post (seems like a while ago now), that I may ask for some more feedback. Those of you who receive our newsletter, will have noticed that we asked for some feedback on Trustpilot (https://www.trustpilot.co.uk/review/wellesley.co.uk). We are trying to establish a presence on Trustpilot as it allows people to read reviews on Google and will raise our profile. Those who received the email will have an individual link in that email which means that you do not have to sign up to Trust Pilot as you are a verified customer of ours. Trust Pilot allows potential lenders to read user reviews, much like you would for a book, restaurant etc and I feel this may appeal to some who may not understand the depth which is reached on this forum. Kind Regards, Wellesley & Co.
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spiral
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Post by spiral on Jun 9, 2014 9:10:32 GMT
The last thing we want to do is release something that is not ready and will cause disruption on what is the most important and sensitive part of the platform. That didn't bother Thincats
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shimself
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Post by shimself on Jun 9, 2014 20:40:02 GMT
The last thing we want to do is release something that is not ready and will cause disruption on what is the most important and sensitive part of the platform. That didn't bother Thincats That's not fair, they (Thincats) didn't mess up the bidding. They just promised new improved site and delivered very little; but for those who haven't been there in the last couple of months, it now works at a perfectly reasonable speed. The navigation is still god awful, but most importantly the quality of the propositions and the Q&A is imho the best around.
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elliotn
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Post by elliotn on Jun 10, 2014 12:40:16 GMT
Apologies, if I have missed or misunderstood this.
Does anyone know how the dynamic reallocation handles loans that are in late payment.
Is there ring-fencing to prevent subsequent lenders picking up an already delinquent loan.
Would these be locked in proportion to the existing lenders at the point of non-payment and the remainder of the loan book reallocated as normal.
This touches on transparency around what amounts and to whom you are lending.
I've just completed an interest payment/withdrawal cycle but this is playing on my mind before increasing my investment at the current rates.
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Post by wellesleyco on Jun 11, 2014 15:42:09 GMT
Hi @elliotm, In the event of a delinquent loan, this would be ringfenced from the algorithm and subsequent lenders would not be reallocated to this loan. Thank you to those who posted a review on our TrustPilot Page
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webwiz
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Post by webwiz on Jun 11, 2014 19:35:06 GMT
If a loan is repaid before the investor/lender's term expires what happens to the money? Does it go back in the holding account?
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Post by wellesleyco on Jun 12, 2014 15:35:02 GMT
webwiz Yes the funds would go back into the client holding account and be re-matched on the next re-matching. While these funds are in the holding account you will still be earning interest. I hope this clarifies!
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Post by yorkshireman on Jul 1, 2014 9:38:24 GMT
The Wellesley board has gone very quiet, no posts since June 12, is that because lenders are satisfied with the way things are going or have they taken their bats home as a result of the interest rate cuts?
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Grumpy mamil
Life is too short for cheap red wine
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Post by Grumpy mamil on Jul 1, 2014 15:23:42 GMT
With you on that one Samford 71. Time to move on.
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