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Post by batchoy on Feb 9, 2015 9:33:00 GMT
Maybe you had a difference experience in the past, but that's my experience right now. Example: loan #108 £157K available on the market to buy (so a supply imbalance) My target has been below my holding for probably 2 weeks now, and nothing has sold (not a penny). Same applies to #107 Neither have trading issues or are paused, so your statement is not correct. I have the feeling that, given the large amount already available on the market, my parts are not going to sell any time soon, even partially. The #104,#107, #108, #109 and #111 are all loans to the same business with the first tranche being £1,000,000 most lenders took their fill on that loan and not wishing to expose themselves further to the same company are not taking part to the same extent in loans #107, #108, #109 and #111. So I'm not surprised that they are not selling quickly. With regards to my holdings in these loans it took 2-3 weeks clear the off completely a few pence at a time.
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Post by Deleted on Feb 9, 2015 9:41:33 GMT
I guess they may not be popular because of (relatively) low interest rates offered, and also because they are probably long term investments if people buy them, but then can't sell them because they are (relatively) less attractive to other loans on the platform.
Personally, I wouldn't mind purchasing some more of those, if there was a year or less of repayment left. However, committing to a 10% loan for 20 months + makes it less attractive to me.
Ideally, I just would like some market fluidity (or let the market naturally adjust supply and demand, by varying prices) and therefore being able to diversify further. Also, ideally to be able to get out and sell the loans (even at a loss) if need be (which is not possible currently).
However, not an issue for me, as I understand the rules now. For anything that has a (relatively) low interest rate on AC, and a payment term > 12 months, I will limit my investment (so that not a large amount is committed for too long). In term of diversification, I guess it will happen (very) progressively.
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Post by Deleted on Feb 9, 2015 9:45:10 GMT
The #104,#107, #108, #109 and #111 are all loans to the same business with the first tranche being £1,000,000 most lenders took their fill on that loan and not wishing to expose themselves further to the same company are not taking part to the same extent in loans #107, #108, #109 and #111. So I'm not surprised that they are not selling quickly. With regards to my holdings in these loans it took 2-3 weeks clear the off completely a few pence at a time. Valid point indeed, they are related to the same company. However, I am assuming they are secured against different assets, so the risk should still be limited, but this brings again the issue of true diversification opportunities on AC currently, for new joiners. I have been trying to sell some holdings on two of those for probably 2 weeks now (by reducing the target), and I haven't sold a single penny.
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bigfoot12
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Post by bigfoot12 on Feb 9, 2015 10:47:02 GMT
...I am assuming they are secured against different assets... My Bold. Very dangerous in this world. Sometimes these things will be and sometimes not. In this case I think that they all rank pari passu so I don't think there is any point in owning more than one tranche. Certainly the sum of your positions in these loans should be no greater than your maximum. It might be worth having a £1 of each in case any emails get sent out.
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Post by davee39 on Feb 9, 2015 11:08:09 GMT
Of the 3 business lenders reviewed I will stick with FC.
Rebs:
Pro - Higher interest rates?
Have you mentioned the quality of the loans? The top business currently on offer has a director who has previously been declared bankrupt. Now, why would these loans go out at 15 - 18% when FC loans to similar companies would cost perhaps 12 - 14%?
In short they have a few high risk loans on offer from some not very appetizing looking companies and I cannot see them growing to become a significant market player.
Assetz:
Clearly a highly professional business lender. My main concern remains the complexity of the offer, and the potential of a slow exit for certain loans. While they are addressing some of this though automation of investment accounts I still see them as targeted at a more sophisticated lender. The tie up with venture capital is interesting. The first P2P Investment Trust (Global) is currently at an 18% premium, but I would consider an investment trust solution at a lower cost, and pay a decent fee to have a simple entry and exit route while still capturing a good income.
Good old FC
They have justifiably had some stick on this forum. The website is appallingly inefficient and the account management resembles a 2 year old with a pile of marbles, sometimes the marbles roll in the wrong direction. So why do I stay?
Firstly my returns after losses, fees and accounting mishaps are > 10%
Instant deposits by Debit Card
There is large deal flow so there are almost always interesting loans available
Exit is quick and easy. All my loans are sold within 6 months, usually at a small premium. Loans listed at par normally go within 24 hours. After about 18 months building up my investment, profits from loan part sales just about cover
losses and fees
Finally a comment on my portfolio management, which is designed to supplement my pension income
16% Ratesetter @ 5.8% ave return
10% Zopa @ 5.0% ave return (repayments are being withdrawn)
4% FC @ 10 to 12% (I expect this to rise to 6% before fear overtakes greed)
The rest is in an equity/bond portfolio and Traditional FSCS protected accounts. New money is split between a savings account paying 1% (for security and instant access), RS and FC to provide an income boost.
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Post by Deleted on Feb 9, 2015 11:21:23 GMT
Some good points.
ReBS: yes, if the interest is higher, then risk must also be higher! I am a new investor, so don't have an accurate picture of the loans history. However, according to the stats published by the platform, they claim they have had no losses so far, and a few defaults.
In their current form (and website appeal), I don't see them becoming a large player either, unless they make their website look a bit more professional, and provide more details on security.
Assetz: yes, possibly some issue with slow exiting of some loans, until they (re)-introduce some of the discount functionality for selling parts. Apparently, I may have joined at a particular slow time, and they have a lot in the pipeline (as well as new functionality planned).
FC: the volume of possible deals is of course greater, so I guess careful investors (with time!) get a lot more to chose from and can diversify further, and quick exit is possible if need be.
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markr
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Post by markr on Feb 9, 2015 13:03:54 GMT
I like ReBS, I get the impression that they form quite a strong relationship with their borrowers and introducers, which probably helps when things go wrong. An example is a recent mail shot sent out to investors which had been printed by one of their borrowers (and included a piece of cake made by another one). Unfortunately, ReBS used our cake-enhanced happy feelings as a cover to subtly hint that they are considering introducing lender fees at some point in the future.
ReBS also have a nice points feature where certain activities on the site (including just logging in once a day) earn points which may entitle their holder to a share of an annual profit-related bonus payout in the future, although the aforementioned cakevert revealed that, yet again, the payout was 3 tenths of sod all, but hinted we may get something next year.
There's currently a cash back promotion where you can earn 0.5% on the first £10000 invested, so now's a good time to dip a toe in.
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sl75
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Post by sl75 on Feb 9, 2015 15:22:00 GMT
Very dangerous in this world. Sometimes these things will be and sometimes not. In this case I think that they all rank pari passu so I don't think there is any point in owning more than one tranche. Certainly the sum of your positions in these loans should be no greater than your maximum. One good reason to have units from more than one tranche is that if I later wish to reduce my exposure to the business by a relatively small amount (up to 20% of current holding), I can reduce the target on ALL of them, and thus have up to 5 times the opportunity to succeed in reducing exposure, so potentially succeed in doing so faster. (This would be followed by a slower "rebalancing" exercise seeking to re-equalise the targets over time).
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bigfoot12
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Post by bigfoot12 on Feb 9, 2015 15:47:38 GMT
One good reason to have units from more than one tranche is that if I later wish to reduce my exposure to the business by a relatively small amount (up to 20% of current holding), I can reduce the target on ALL of them, and thus have up to 5 times the opportunity to succeed in reducing exposure, so potentially succeed in doing so faster. (This would be followed by a slower "rebalancing" exercise seeking to re-equalise the targets over time). Interesting idea. I bought some tranche 2 units over Christmas and I chose that because the amount on the AM was lowest. I expected that they would sell quicker.
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Post by Ton ⓉⓞⓃ on Feb 9, 2015 16:46:14 GMT
Some good points. ReBS: yes, if the interest is higher, then risk must also be higher! I am a new investor, so don't have an accurate picture of the loans history. However, according to the stats published by the platform, they claim they have had no losses so far, and a few defaults. In their current form (and website appeal), I don't see them becoming a large player either, unless they make their website look a bit more professional, and provide more details on security. Assetz: yes, possibly some issue with slow exiting of some loans, until they (re)-introduce some of the discount functionality for selling parts. Apparently, I may have joined at a particular slow time, and they have a lot in the pipeline (as well as new functionality planned). FC: the volume of possible deals is of course greater, so I guess careful investors (with time!) get a lot more to chose from and can diversify further, and quick exit is possible if need be. I've just been pruning my AC loan book, within minutes I think I've sold 90-95% of what I intended, generating almost 10 full pages of shrapnel in my statement. I have no concerns over speed of selling as a result, from previous experience the last 5-10% will sell over the next few hours and days, with the last bits taking a week; in extreme maybe a month. I'd like the return of Markdown but it's not vital at the moment for me, there's the possibility of Mark UP I'm not so sure about that tho'. With my sale Wrexham #78 looked like one of the most popular, I think that partly due to a large part having been repaid and thus reducing availability.
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bigfoot12
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Post by bigfoot12 on Feb 9, 2015 17:42:24 GMT
With my sale Wrexham #78 looked like one of the most popular, I think that partly due to a large part having been repaid and thus reducing availability. Probably with targets still being at the higher level, too.
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mikes1531
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Post by mikes1531 on Feb 10, 2015 0:22:29 GMT
The #104,#107, #108, #109 and #111 are all loans to the same business with the first tranche being £1,000,000 most lenders took their fill on that loan and not wishing to expose themselves further to the same company are not taking part to the same extent in loans #107, #108, #109 and #111. So I'm not surprised that they are not selling quickly. Valid point indeed, they are related to the same company. However, I am assuming they are secured against different assets, so the risk should still be limited, but this brings again the issue of true diversification opportunities on AC currently, for new joiners. I have been trying to sell some holdings on two of those for probably 2 weeks now (by reducing the target), and I haven't sold a single penny. As has been pointed out by someone else, all five loans are secured by the same assets and are ranked pari passu. Taken together, it's a £2M loan with £1.2M available on the aftermarket. Even the very first part -- it drew down seven months ago -- has over half of its parts on the Aftermarket. I expect most of those are held by underwriters still trying to exit their position. IMHO, one additional reason why this loan isn't popular is the security -- there's no bricks and mortar included. It's 97.5% debentures from the company and 2.5% via an unsecured PG. I have avoided these loans, and I expect they'll be slow to sell for months to come. ... if the interest is higher, then risk must also be higher! That might be expected in a perfect market, but P2P these days is anything but a perfect market. New platforms abound, and old platforms come in and out of favour. Platforms start in one area and move into others -- SS and FS are two good examples of that. Some platforms are trying hard to grow, so they might offer better terms to attract business. Others may have a supply/demand imbalance, so they adjust their attractiveness in an attempt to address that. In short, the sector isn't mature enough to have settled down so that there's a good risk/return relationship. An investor who looks closely at the various opportunities probably would find that some platforms are better value for money than others -- at the moment. But they also need to continue to watch carefully as things are fluid and will change over time. What's good value today might not be good value tomorrow!
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bigfoot12
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Post by bigfoot12 on Feb 10, 2015 11:01:15 GMT
IMHO, one additional reason why this loan isn't popular is the security -- there's no bricks and mortar included. It's 97.5% debentures from the company and 2.5% via an unsecured PG. I have avoided these loans, and I expect they'll be slow to sell for months to come. I understand that the security isn't as straightforward as some other offerings, but that 97.5% debentures has a built in 25% discount to asset built into it. The products they finance have this discount. Their borrowers also are covered by a credit insurance policy should they fail to repay so I think that on the whole security is actually quite good.
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jjc
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Post by jjc on Feb 10, 2015 18:34:04 GMT
To add to bigfoot12's good points I would say - good biz model & experienced management - part of a group with various revenue streams - strong covenant cover - the PG though unsecured ties the director to the success of the business, given his background & what he’s trying to do with this venture it would be a disaster for him (likely to wreck all his future career prospects) if he had to declare himself bankrupt I take mike's point bricks & mortar always welcome but I do see these as valid loans, so have invested in all tranches (same reasoning as sl75 above - tried & tested btw) – for a total across these lower than my usual max stake. The game-changer for me would be if AC were to have a packaged investment account (similar to GEIA) investing in these 5 tranches. Would make them much more liquid, appetising & generally good to go for a much wider lending base. |
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mikes1531
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Post by mikes1531 on Feb 10, 2015 23:21:35 GMT
IMHO, one additional reason why this loan isn't popular is the security -- there's no bricks and mortar included. It's 97.5% debentures from the company and 2.5% via an unsecured PG. I have avoided these loans, and I expect they'll be slow to sell for months to come. I understand that the security isn't as straightforward as some other offerings, but that 97.5% debentures has a built in 25% discount to asset built into it. The products they finance have this discount. Their borrowers also are covered by a credit insurance policy should they fail to repay so I think that on the whole security is actually quite good. I haven't looked into this particular case, so this comment may not actually apply here, but one of the concerns I have in general regarding debentures/stock/invoices as security is that, while they exist at the time the loan is made, if the business gets into trouble and starts losing clients, etc., isn't there a risk that the backlog of invoices and level of stock could end up being run down in the process, such that by the time the loan payments stop and it becomes necessary for AC to enforce the security the value left in the company is insufficient to cover the outstanding loans, especially if other creditors also have similarly ranking claims against the company's assets?
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