oldgrumpy
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Post by oldgrumpy on Jul 30, 2014 12:43:34 GMT
Aaahh!! Auto-invest snaffled me a little bit of Liverpool Frenetic, and a nice piece of K+Group (nice bit of detail, my overall stake there is now yielding 14.44089809495%)
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baz657
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Post by baz657 on Jul 30, 2014 14:04:03 GMT
There are a large range of different loan units on the aftermarket as of 12.45 30/07/14 Thanks for the heads up - added another couple of loans that were listed before my time on there.
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mikes1531
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Post by mikes1531 on Jul 30, 2014 18:35:37 GMT
Wow ... somebody has snaffled up a chunk of my Ha**ney and Ip**ich. Have found it hard to get rid of Ip**ich I'm trying to offload before expiry while others are perhaps positioning for a nice bit of default interest. I had a chunk of Ip**ich for sale for a while with no luck. Eventually, something else I had for sale found a buyer, and I took the Ip**ich off sale. I'm going to be on holiday when Ha**ney matures, so I thought it best if I got out now and redeployed my capital, so I put nearly all of my holding up for sale a few weeks ago. I got the occasional bite, but things were going very slowly until 1117 and 1207 today, when a couple of good-sized chunks were sold. That must have been about the same time that the odd bits and pieces of other loans were offered for sale, because AutoInvest used all the cash raised by the Ha**ney sales to pick up some of the parts of the other loans. The odd thing, however, is that there now appears to be more Ha**ney units for sale than there were before mine were purchased. IIRC, there was a bit less than £80k of units for sale yesterday, whereas now there is £117k for sale.
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kermie
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Post by kermie on Jul 30, 2014 20:45:17 GMT
I don't think there is any particular logic to the order in which loan parts are bought up on the AM, from what I can fathom. If there's mark-downs, buyers (and AI) may well hunt those out first. Otherwise the way the website front-end auto-selects the loan parts when you enter an amount to buy (or does so via AI automatically) seems fairly random to me. I'm not sure I want to kick off a thread on how this could be made to be fair to sellers - I hear that previous discussions went on for weeks.  I am repeatedly surprised that someone is buying my H*****y loan parts as I try to reduce my exposure before redemption in about a couple of weeks time. What goes through a buyer's mind to think that taking on the tail-end risk is worth it for 0.5% return (i.e., two weeks at 12% p.a.)? Whoever they are, it's appreciated  |
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Post by chris on Jul 30, 2014 21:28:01 GMT
I don't think there is any particular logic to the order in which loan parts are bought up on the AM, from what I can fathom. If there's mark-downs, buyers (and AI) may well hunt those out first. Otherwise the way the website front-end auto-selects the loan parts when you enter an amount to buy (or does so via AI automatically) seems fairly random to me. I'm not sure I want to kick off a thread on how this could be made to be fair to sellers - I hear that previous discussions went on for weeks. I am repeatedly surprised that someone is buying my H*****y loan parts as I try to reduce my exposure before redemption in about a couple of weeks time. What goes through a buyer's mind to think that taking on the tail-end risk is worth it for 0.5% return (i.e., two weeks at 12% p.a.)? Whoever they are, it's appreciated It's in order of largest discount first then at random. The underwriters requested this so that it didn't matter which of them listed their loan parts first. That may change on the refreshed site as underwriter loan units will be automatically listed, negating the need to randomise everyone elses loan units. Of course if we do away with the randomisation then it would mean all underwritten loan units would need to sell before any user held units so maybe it's best to keep it as is.
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kermie
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Post by kermie on Jul 30, 2014 21:38:24 GMT
It's in order of largest discount first then at random. The underwriters requested this so that it didn't matter which of them listed their loan parts first. That may change on the refreshed site as underwriter loan units will be automatically listed, negating the need to randomise everyone elses loan units. Of course if we do away with the randomisation then it would mean all underwritten loan units would need to sell before any user held units so maybe it's best to keep it as is. Thanks for that. I'd most definitely rather have randomness than the certainty of de-prioritising lenders vs underwriters. The AM playing field can already feel a little "unlevel" for loans with large underwriting elements...so I'd not want to make that worse. That, of course, is a very lender-centric view - underwriters may well feel it's entirely fair!...they are just as entitled to liquidity as lenders...but it can feel a little David and Goliath sometimes.
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mikes1531
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Post by mikes1531 on Jul 31, 2014 1:34:22 GMT
It's in order of largest discount first then at random. The underwriters requested this so that it didn't matter which of them listed their loan parts first. That may change on the refreshed site as underwriter loan units will be automatically listed, negating the need to randomise everyone elses loan units. Of course if we do away with the randomisation then it would mean all underwritten loan units would need to sell before any user held units so maybe it's best to keep it as is. I'd most definitely rather have randomness than the certainty of de-prioritising lenders vs underwriters. The AM playing field can already feel a little "unlevel" for loans with large underwriting elements...so I'd not want to make that worse. That, of course, is a very lender-centric view - underwriters may well feel it's entirely fair!...they are just as entitled to liquidity as lenders...but it can feel a little David and Goliath sometimes. I agree that prioritising underwriters over lenders is a retrograde step. It would make lenders reluctant to pick up units on the AM while the underwriters still are holding large amounts for fear that they couldn't sell any units if they needed to. The end result would be lenders waiting to buy units until the last minute -- i.e. just before the underwriters run out of units to sell -- and that would mean the underwriters having to hold their units even longer than they do now. If AC are going to prioritise anyone, it ought to be the lenders over the underwriters. That's what SS have done, and I expect it has encouraged lenders to invest more. The whole purpose of underwriters is to pick up the units that lenders don't want at first, and then dispose of them when there is surplus demand from lenders -- so they really ought to be at the bottom of the priority order.
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mikes1531
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Post by mikes1531 on Jul 31, 2014 3:16:29 GMT
About £20k worth of LTL Number 2 (Auction 11) units are available. (That's more than a third of the £54k loan.)
With the less than enthusiastic response 9-10% loans are receiving at the moment, it will be interesting to see how quickly these 6.5% units are taken up.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jul 31, 2014 8:30:28 GMT
........................................... If AC are going to prioritise anyone, it ought to be the lenders over the underwriters. That's what SS have done, and I expect it has encouraged lenders to invest more. The whole purpose of underwriters is to pick up the units that lenders don't want at first, and then dispose of them when there is surplus demand from lenders -- so they really ought to be at the bottom of the priority order. Mikes expectation is spot on - I have personally put more money into loans on SS than I would have done if it were less likely I would be able to sell them. Although I only lend money that I could hold to term as a leading principle, as a secondary prinicple I consider the ability to sell them on should I feel like it. And at least one other member has indicated that they were about to invest in a heavily underwritten loan over there on the basis that they would be able to sell out ahead of all the underwriter funds. I would say it is more than probable that a number of AC lenders avoid buying loan parts on the heavily underwritten loans due to the likely difficulty in selling. If the new model means that more and more loans involve significant underwriting, then I'd have thought AC need to give this some serious thought if they feel they need the little guys. Of course, they could probably have a successful business using only the big guys now that they have got off the ground and are up and running................................. 
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oldgrumpy
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Post by oldgrumpy on Jul 31, 2014 9:00:18 GMT
AC's website is (I think) deliberately "low key" on the subject of lenders being able to get their cash back when required. This concise but careful statement: " Sell all or part of your loan at any time to free profit, release cash or re-balance the risk in your portfolio, (subject to demand on our Aftermarket)" shows today. (My bold emphasis). Was that proviso stuck on the end at a later stage, now that some delay can be expected? (...and what happened to full stops at the end of sentences, Chris?  ) If I want to sell a £100 in West Lancs Care to buy another eight cases of ale, I might go a bit thirsty for a while, with 17,206 units of £100 already for sale on the Aftermarket. Back of the queue Grumples...check on progress in 2016!  Do the regulators make any rules about the availability of real liquidity, rather than just a facility which may or may not work in reasonable time? edit: In reality, I usually invest in loans with the purpose of holding to the end. My "emergency" liquidity is obtained elsewhere. Having said that, overinvesting in the small loans so that I can quickly part-sell to cover shadow call-ins is an option I like. |
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merlin
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Post by merlin on Jul 31, 2014 9:07:36 GMT
........................................... If AC are going to prioritise anyone, it ought to be the lenders over the underwriters. That's what SS have done, and I expect it has encouraged lenders to invest more. The whole purpose of underwriters is to pick up the units that lenders don't want at first, and then dispose of them when there is surplus demand from lenders -- so they really ought to be at the bottom of the priority order. Mikes expectation is spot on - I have personally put more money into loans on SS than I would have done if it were less likely I would be able to sell them. Although I only lend money that I could hold to term as a leading principle, as a secondary prinicple I consider the ability to sell them on should I feel like it. And at least one other member has indicated that they were about to invest in a heavily underwritten loan over there on the basis that they would be able to sell out ahead of all the underwriter funds. I would say it is more than probable that a number of AC lenders avoid buying loan parts on the heavily underwritten loans due to the likely difficulty in selling. If the new model means that more and more loans involve significant underwriting, then I'd have thought AC need to give this some serious thought if they feel they need the little guys. Of course, they could probably have a successful business using only the big guys now that they have got off the ground and are up and running................................. RR you echo my sentiments almost exactly. For the last few months I have been pondering just where AC are headed both on rates on offer and the increasing role of underwriters. Currently I have invested up to my personal limit on AC but shortly several loans that I am in will come to maturity, then I will be faced with the question of what to reinvest in. I have always been fairly circumspect as to where, and to whom I will lend and nothing currently on offer on AC lights me up sufficiently to get me to risk my money. SS would look more attractive to me too if only there were more opportunities to chose from.
Finally I still look forward to seeing the new AC "system" up and running. However if it requires one to have an advanced degree in economics and mathematics to get the most out of it, I will quickly pick up my bat and play somewhere else.
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Post by chris on Jul 31, 2014 9:14:02 GMT
The lofty aim is to create a platform that lenders of all sizes can use with equal effect. We want lenders with deep pockets and lenders with shallow pockets to be able to co-exist, and that means not building in advantages or artificial disadvantages for either side. The current random algorithm provides a fair balance between lenders and underwriters with both selling down proportionately.
It's worth remembering that underwriters are a key factor in us being able to grow. There's a constant juggling act between having enough loans on offer and enough lenders to invest in them, with a see-saw effect as they grow at different times. In some threads we were being criticised for not having enough loans on offer, now we have too many, or that loan drawdown times are a pain so people wait for the aftermarket but then get worried that there's little interest in the primary market, etc.
Underwriting is a central plank in our strategy for managing this, whole loans may play a part, but these will always be used to compliment the core peer to peer lender market allowing us to grow our loan origination side of the business with some degree of freedom from being tied to the size of our lender base. We have numerous internal projects aimed at massively growing our lender base and these are likely to take effect in waves so in the short term we need to bolster our loan origination. Andy is doing a great job of this with much much more still to come.
Just a month ago there were effectively no loan units listed for sale by users rather than underwriters. There are a couple of underwriters who had personal accounts who are selling loan units to transfer funds to their underwriter account which is boosting the perception of lender units being for sale. But what most lenders can't currently see is that amount of activity on the aftermarket which is pretty healthy. Yesterday £180k of user held loan units were sold compared to £40k for underwriters. A couple of days earlier and it was £35k of user held loan units vs £430k for underwriters. Demand fluctuates and tends to come in waves but it is there if you hold loan units in a loan other people want or especially if you're prepared to sell at a discount. To date we've sold about as much on our aftermarket as FC had on their primary markets when their site was the same age.
I guess what I'm trying to say is that the aftermarket is healthy, loan units are selling where there is demand for a given loan (e.g. you're selling for personal not loan / strategy related reasons), we're monitoring and tracking everything, and that as with all things on P2P sites things fluctuate and short term trends seem to dominate perception whereas we're trying to operate with a longer term vision and for that we have a plan!
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Post by bengilbert on Jul 31, 2014 9:20:16 GMT
I am repeatedly surprised that someone is buying my H*****y loan parts as I try to reduce my exposure before redemption in about a couple of weeks time. What goes through a buyer's mind to think that taking on the tail-end risk is worth it for 0.5% return (i.e., two weeks at 12% p.a.)? Whoever they are, it's appreciated I was wondering about this. It does seem a little mad to take on all the default risk in return for a fraction of the returns, and a great deal for the seller. On the other hand, another way of looking at it is that the main risk on the loan was that property prices would fall and make the security value fall below the loan amount. Almost 6 months later, that hasn't happened, and you'd imagine the security is looking good. So the sellers are giving up some high returns at the point when the risk on the loan might be at its lowest. It depends, I suppose, on how much of the risk you think is in a general fall in property prices, and how much in specific issues with the borrower, which might make the property worth a lot less than is suggested in the valuation, regardless of what has happened to prices generally.
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Post by chris on Jul 31, 2014 9:24:19 GMT
AC's website is (I think) deliberately "low key" on the subject of lenders being able to get their cash back when required. This concise but careful statement: " Sell all or part of your loan at any time to free profit, release cash or re-balance the risk in your portfolio, (subject to demand on our Aftermarket)" shows today. (My bold emphasis). Was that proviso stuck on the end at a later stage, now that some delay can be expected? (...and what happened to full stops at the end of sentences, Chris? ) If I want to sell a £100 in West Lancs Care to buy another eight cases of ale, I might go a bit thirsty for a while, with 17,206 units of £100 already for sale on the Aftermarket. Back of the queue Grumples...check on progress in 2016! Do the regulators make any rules about the availability of real liquidity, rather than just a facility which may or may not work in reasonable time? edit: In reality, I usually invest in loans with the purpose of holding to the end. My "emergency" liquidity is obtained elsewhere. Having said that, overinvesting in the small loans so that I can quickly part-sell to cover shadow call-ins is an option I like. Don't forget we operate in a regulated industry so the entire site is constantly reviewed by our compliance team to make sure all text is in line with what the regulator expects. Other operators may have a more cavalier attitude but we don't particularly want to be shut down or sued for mis-selling. Hence risk warnings on the site and no promises of zero losses. As far as I'm aware the regulators do not have any rules about liquidity, nor could they IMHO beyond the treating customers fairly rules.
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Post by chris on Jul 31, 2014 9:28:44 GMT
Further to my post about the health of the aftermarket as recently as 7th June there was nothing listed for sale on the aftermarket at all.
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