bigfoot12
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Post by bigfoot12 on Jul 31, 2014 10:33:21 GMT
... whole loans may play a part ... I am very nervous about whole loans. I am worried that large organisations will cherry pick the best offerings leaving the rest of us worse off. Are these imminent?
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Post by chris on Jul 31, 2014 10:42:13 GMT
... whole loans may play a part ... I am very nervous about whole loans. I am worried that large organisations will cherry pick the best offerings leaving the rest of us worse off. Are these imminent? I wouldn't use the word imminent, but my expectation is that they either do already play a part on all the biggest sites or will do in the future and AC won't be any different. It's down to each platform how they manage them. Some are letting them (or will let them) cherry pick, we have a different strategy that will become clear in time but I'll repeat my earlier assertion that we want lenders of all shapes and sizes and will be trying to find a fair balance for all. The relaunch will include some specific functionality aimed at providing that balance. The regulations also have provisions about treating customers fairly, which in my relatively uninformed opinion would include not giving all the best loans to one set of lenders and passing the dregs on to others.
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bigfoot12
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Post by bigfoot12 on Jul 31, 2014 10:55:26 GMT
I'm not the only one worried about whole loans. I just spotted this on the FC section. Whole loans taking over I am not actively lending on FC any more so I don't know how they do this. I have always valued how open AC have been and I have increased my lending more than I anticipated for such a new outfit. I hope that this continues. Will whole loans be listed on the loan archive so that we can be sure that we are not getting the dregs? I think that transparency is generally good and certainly for P2P. I wouldn't expect all the details on the archive, but enough to keep me confidant that I am not at a systematic disadvantage. |
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Post by chris on Jul 31, 2014 11:00:07 GMT
I'm not the only one worried about whole loans. I just spotted this on the FC section. Whole loans taking over I am not actively lending on FC any more so I don't know how they do this. I have always valued how open AC have been and I have increased my lending more than I anticipated for such a new outfit. I hope that this continues. Will whole loans be listed on the loan archive so that we can be sure that we are not getting the dregs? I think that transparency is generally good and certainly for P2P. I wouldn't expect all the details on the archive, but enough to keep me confidant that I am not at a systematic disadvantage. As I say there's more than one approach and we aim to learn from the missteps of others. Should all become clear when the relaunch occurs.
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Post by chris on Jul 31, 2014 11:06:25 GMT
I am very nervous about whole loans. I am worried that large organisations will cherry pick the best offerings leaving the rest of us worse off. Are these imminent? I tend to agree. While I expect institutional investors will take longer than most platforms expect to really get up to speed, once they are most prevalent it's going to be hard for platforms not to tend toward offering the best deals to them, leaving the "retail" lenders with the also-rans. I wonder how many years it will be before I can get a better return from investing in a fund doing P2P lending, and paying them management fees, than investing myself and paying no fees. Why do you believe that? Lending Club in the US have been successfully balancing institutional funds with retail investors for quite a while now. We're not all ham fisted 
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Post by chris on Jul 31, 2014 11:13:23 GMT
I should add that I've also invested my life's savings through AC now as a retail investor so I have a vested interest in keeping things fair for the little guy.
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mikes1531
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Post by mikes1531 on Jul 31, 2014 11:21:44 GMT
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. I would think that the principle of treating customers fairly would mean that putting underwriters' units at the front of the Aftermarket queue would be a pretty obvious non-starter. So why has this even been suggested as a possibility?
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Post by chris on Jul 31, 2014 11:26:20 GMT
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. I would think that the principle of treating customers fairly would mean that putting underwriters' units at the front of the Aftermarket queue would be a pretty obvious non-starter. So why has this even been suggested as a possibility? Was just thinking out loud. You'll notice I changed my mind immediately afterwards and stated as much.
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bigfoot12
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Post by bigfoot12 on Jul 31, 2014 11:28:48 GMT
Perhaps because they are using a price/time order matching algorithm, which is used by many exchanges around the world and most people consider fair.
The underwriters put their loans up for sale first so they are at the front of the queue. Beat them on price, or go behind them. That is fair.
Crossed with chris, but my point still stands
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oldgrumpy
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Post by oldgrumpy on Jul 31, 2014 11:32:36 GMT
"not giving all the best loans to one set of lenders and passing the dregs on to others".
But AC won't have any dregs,.... will it Chris!?
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Post by chris on Jul 31, 2014 11:39:26 GMT
Chris, it's not necessarily a bad thing but it depends on execution (like everything). I find it easy to imagine that a large fund willing to deploy hundreds of millions will be very easily be able to get a better deal (both higher yields and in choice of loans) than a retail investor. If the management fee on that fund is say 1%, but they are capable of negotiating a 2% high yield (by offering the platform the ability to print a much higher volume of loans in return for some margin compression) with better diversification/security/ODD, I'd be silly not to consider investing in P2P through the fund rather than direct. If that's how you can get the best deal for you... But that's not how I expect it to play out. We have a different strategy to that employed by FC that will become clear in time. I expect institutional funding to be a good thing for retail investors in both the short and long term and I say that as a retail investor myself. This is being constantly discussed internally to make sure we get the balance right and concerns such as yours have been aired and addressed.
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Post by Ton ⓉⓞⓃ on Aug 8, 2014 20:42:59 GMT
Wasn't paying huge attention to AM in last week but looking through a number of loans, I noted discounts of 0.5% again (MTFP, WLCH, N Loth**n, Ip***ch, Ep***g), all from same underwriter. Assuming this is push to recycle funds back so can underwrite other loans. I find waiting for the 0.5% discount from this underwriter to be more effective than bothering with trying to get 0.5% cashback! Are you implying that the log-jam on the AM is holding up underwriting on the Primary (Yacht loan, North Wales, York Phones) in which case lets start buying and help those guys.
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j
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Post by j on Aug 13, 2014 16:51:36 GMT
Some WM industrial units available now, I say some, about £27k
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Post by Ton ⓉⓞⓃ on Aug 13, 2014 19:12:27 GMT
Some WM industrial units available now, I say some, about £27k I see some Lenders are selling already... We kind of have two AM's now; the liquid and the illiquid. Given that I just bought up to my max on this loan, hoping to be easily able to sell it when needed. Or will I just get stuck in this one too...
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j
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Penguins are very misunderstood!
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Post by j on Aug 19, 2014 20:53:53 GMT
Some Leeds units have popped up o AM
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