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Post by webbski9 on Feb 23, 2015 15:49:43 GMT
Is there any timescale for a Secondary Market ?
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mikes1531
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Post by mikes1531 on Feb 23, 2015 21:15:59 GMT
Is there any timescale for a Secondary Market ? In a word, No. It was probably a year ago that FS said they hoped to have one in about six months. But nothing happened. Since then, I get the feeling they've gone off the idea, but I can't remember whether they've ever said anything officially.
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bugs4me
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Post by bugs4me on Feb 23, 2015 22:27:29 GMT
Is there any timescale for a Secondary Market ? In a word, No. It was probably a year ago that FS said they hoped to have one in about six months. But nothing happened. Since then, I get the feeling they've gone off the idea, but I can't remember whether they've ever said anything officially. I don't recall anything else being mentioned by FS. It has been flagged on the forum more than a couple of times but zero response. I expect that as they are able to achieve 100% funding ATM then they don't feel any need to develop that side of the platform.
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mikes1531
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Post by mikes1531 on Feb 24, 2015 3:09:38 GMT
I expect that as they are able to achieve 100% funding ATM then they don't feel any need to develop that side of the platform. No doubt that influences their thinking. Then again, they'd like to be able to make larger loans, and have asked whether people might be interesting in investing £50+k in one of those. I don't have a clue what sort of response they got to that request, but I'd expect them to have a lot more takers if investors knew they could reduce their holding gradually over time to new investors, or could liquidate part of their holding if necessary. And if they could reduce their holdings in one mega-loan they'd probably be a lot more amenable to putting £50+k into the next FS mega-loan that came along. Also, I expect that the existence of a secondary market would convince smaller investors to increase their overall investment in FS as well, picking up lots of parts from the mega-investors who are freeing up funds to enable them to invest in the next mega-loan. I could be wrong, but I get the feeling that FS are basing their negative feelings towards such a market on the work required to create and keep track of it rather than taking account of these secondary effects that could make the platform work better for them. But that's JMHO.
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Post by fundingsecure on Feb 24, 2015 12:12:01 GMT
Just a quick note to update this topic.
As correctly pointed out, some time ago we stated that a secondary market was planned to be added. Unfortunately, at that stage, the site design was such that it proved impossible to implement. With the new site it is feasible, in fact it would be relatively straight forward. We do not, as yet, have a planned date for implementation as there are other areas which we deem to be more important.
There have been several postings on the forum relating to the need to have a secondary market. In addition we previously collected data from a survey. Finally we regularly speak to investors (by email, phone and livechat). Although there is certainly some interest in a secondary market the overwhelming view (somewhat surprisingly) has been that, due to the six month term of our loans, it would not be a major benefit.
Nevertheless we recognise that for some investors it would be potentially beneficial, to buy and quickly obtain a more diverse holding or to sell and potentially liquidate one's holding. It therefore remains in our plan to implement a secondary market, but at this stage no firm date has been set.
FundingSecure
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row
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Post by row on Feb 24, 2015 13:05:23 GMT
Me too. I have no problem putting a large 4 figure sum or a small 5 figure sum on a platform where i know i can easily sell up ( within hours at most ). At the moment, i would never do this on FS....not until an active secondary market is in place.
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Post by mrclondon on Feb 24, 2015 14:15:16 GMT
Given some of the very largest loans can be a bit of a struggle to get 100% full, I am surprised that FS doesn't see the willingness of lenders such as myself to act as quasi-underwriters on such loans IF there was a secondary market to allow a subsequent reduction of exposure.
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Post by webbski9 on Feb 24, 2015 15:49:16 GMT
One would have thought so !
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mikes1531
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Post by mikes1531 on Feb 24, 2015 18:22:57 GMT
Given some of the very largest loans can be a bit of a struggle to get 100% full, I am surprised that FS doesn't see the willingness of lenders such as myself to act as quasi-underwriters on such loans IF there was a secondary market to allow a subsequent reduction of exposure. I am very surprised as well. I expect that having a secondary market probably would eliminate most of FS's underwriting requirements -- and make it easier to secure underwriting on those relatively rare occasions when they need some. I'm similarly surprised by the "overwhelming view" that a secondary market "would not be a major benefit". The answers given to any 'poll', of course, depend very much on the exact questions asked. On this subject, for instance, I expect that asking "Would having a secondary market so that you could liquidate your holdings before maturity be of benefit for you?" would produce a very different result than asking "Would having a secondary market so that you could diversify your holdings be of benefit for you?" I'd suggest setting up a poll here, but I doubt that the sample size would be large enough and/or representative enough to be of any use to anyone, but perhaps fundingsecure could add one to their website to occupy their investors while waiting around for a new loan to go live. PS. Am I the only one who finds being presented with a screen saying 'Welcome to our new website' to be a bit inappropriate considering how long ago this new website was introduced? Or have I missed something that's more recently new?
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bugs4me
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Post by bugs4me on Feb 24, 2015 22:50:18 GMT
Given some of the very largest loans can be a bit of a struggle to get 100% full, I am surprised that FS doesn't see the willingness of lenders such as myself to act as quasi-underwriters on such loans IF there was a secondary market to allow a subsequent reduction of exposure. I am very surprised as well. I expect that having a secondary market probably would eliminate most of FS's underwriting requirements -- and make it easier to secure underwriting on those relatively rare occasions when they need some. I'm similarly surprised by the "overwhelming view" that a secondary market "would not be a major benefit". The answers given to any 'poll', of course, depend very much on the exact questions asked. On this subject, for instance, I expect that asking "Would having a secondary market so that you could liquidate your holdings before maturity be of benefit for you?" would produce a very different result than asking "Would having a secondary market so that you could diversify your holdings be of benefit for you?" I'd suggest setting up a poll here, but I doubt that the sample size would be large enough and/or representative enough to be of any use to anyone, but perhaps fundingsecure could add one to their website to occupy their investors while waiting around for a new loan to go live. PS. Am I the only one who finds being presented with a screen saying 'Welcome to our new website' to be a bit inappropriate considering how long ago this new website was introduced? Or have I missed something that's more recently new? I'm still of the opinion that a SM will not happen ATM whilst the loans are being funded and the number of lenders continues to grow. Goodness, we've been droning on about having it for long enough and IMO it doesn't need to appeal to the majority of lenders as I'm sure most of them view the loans as a fixed 6 months. The majority of the loans have until recently been restricted investments so the facility to offload a £50 or £100 holding isn't really that important. Once though you move into higher investment requirements then not having an exit route is sometimes or maybe often a deterrent to committing more funds. The website wording is probably inappropriate now but I've never thought FS have considered this to be a high priority albeit it is their 'shop window'.
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Post by Duane Dibley on Mar 2, 2015 8:08:36 GMT
I'm similarly surprised by the "overwhelming view" that a secondary market "would not be a major benefit". I'm one of those who don't see any need for a secondary market. The loans on FS are in general all short term loans for six months and only have small investment limits anyway. If someone really needs to access that money within the six months then I'd suggest p2p lending wasn't really suitable and they'd be better off with bank deposits or sticking their money under the mattress. The only reason I can see for a secondary market is to divest possibly defaulting loans a few days before maturity as a means of risk removal. That's a tactic I used with all the Saving Stream boat loans and there was never a shortage of people willing to buy. Either they didn't know what they were doing or were desperate to get their hands on loan parts even for two or three days.
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ramblin rose
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Post by ramblin rose on Mar 2, 2015 10:04:37 GMT
I'm similarly surprised by the "overwhelming view" that a secondary market "would not be a major benefit". I'm one of those who don't see any need for a secondary market. The loans on FS are in general all short term loans for six months and only have small investment limits anyway. If someone really needs to access that money within the six months then I'd suggest p2p lending wasn't really suitable and they'd be better off with bank deposits or sticking their money under the mattress. The only reason I can see for a secondary market is to divest possibly defaulting loans a few days before maturity as a means of risk removal. That's a tactic I used with all the Saving Stream boat loans and there was never a shortage of people willing to buy. Either they didn't know what they were doing or were desperate to get their hands on loan parts even for two or three days. I was in agreement with you about there not being a need for it when all they did were the non-property loans. Now they've moved into property it remains to be seen how close to the six months people will see their money returned; we know well from other platforms that a six-month bridge almost universally doesn't get repaid at the end of six months. It then takes many, many months to get the loan satisfactorily completed, either by waiting for the borrower to get to the end of the long-winded process of sorting their follow-on long-term finance, get their sale processed, or in a worst case taking over the charge on the property and selling it on behalf of the lenders. Since we have no idea how FS will deal with this yet, I've stayed out of the property loans so far. However, those who are in may well find their '6 month' investment goes on for very much longer. For this reason, if FS are continuing with property going forward, then I now feel a secondary market is needed. Of course, FS may have a way of paying back lenders for their property loans at the end of 6 months without needing to wait for the delays to get sorted, but we just don't know yet.
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bugs4me
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Post by bugs4me on Mar 2, 2015 10:25:42 GMT
I'm one of those who don't see any need for a secondary market. The loans on FS are in general all short term loans for six months and only have small investment limits anyway. If someone really needs to access that money within the six months then I'd suggest p2p lending wasn't really suitable and they'd be better off with bank deposits or sticking their money under the mattress. The only reason I can see for a secondary market is to divest possibly defaulting loans a few days before maturity as a means of risk removal. That's a tactic I used with all the Saving Stream boat loans and there was never a shortage of people willing to buy. Either they didn't know what they were doing or were desperate to get their hands on loan parts even for two or three days. I was in agreement with you about there not being a need for it when all they did were the non-property loans. Now they've moved into property it remains to be seen how close to the six months people will see their money returned; we know well from other platforms that a six-month bridge almost universally doesn't get repaid at the end of six months. It then takes many, many months to get the loan satisfactorily completed, either by waiting for the borrower to get to the end of the long-winded process of sorting their follow-on long-term finance, get their sale processed, or in a worst case taking over the charge on the property and selling it on behalf of the lenders. Since we have no idea how FS will deal with this yet, I've stayed out of the property loans so far. However, those who are in may well find their '6 month' investment goes on for very much longer. For this reason, if FS are continuing with property going forward, then I now feel a secondary market is needed. Of course, FS may have a way of paying back lenders for their property loans at the end of 6 months without needing to wait for the delays to get sorted, but we just don't know yet. - folks (including me) have been droning on about the need for a SM for some time now as you know. It seemed that a few months ago, as FS drifted into higher value loans then this would be a natural progression for the platform. IIRC, FS did mention a while back that they were looking at it or may consider it but nothing has materialised. Probably, but it's only supposition on my part, in the event that a loan fails to repay on time all FS will do is simply roll it over into a new one. From experience, though on another platform, those 6 month property loans do seem wildly optimistic so I'm in agreement with you on this one. Guess we'll have to wait and see but I'm now staying out of the property loans unless the LTV is very conservative and the funds can be realised in the event of a fire sale - especially the commercial offerings.
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mikes1531
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Post by mikes1531 on Mar 2, 2015 14:36:58 GMT
I'm similarly surprised by the "overwhelming view" that a secondary market "would not be a major benefit". I'm one of those who don't see any need for a secondary market. The loans on FS are in general all short term loans for six months and only have small investment limits anyway. If someone really needs to access that money within the six months then I'd suggest p2p lending wasn't really suitable and they'd be better off with bank deposits or sticking their money under the mattress. The only reason I can see for a secondary market is to divest possibly defaulting loans a few days before maturity as a means of risk removal. I'm one of those who do feel a secondary market would be helpful -- to me, other investors, and FS. I'm happy to let most of my FS investments run for their full term. But they weren't all subject to small investment limits, so I have some large FS investments as well, and I would like to be able to diversify my portfolio by using some of the money tied up in those to invest in new opportunities as they come available. I expect that newer FS investors also would like to be able to build up a diversified portfolio more quickly than is possible currently, and a secondary market would enable that.
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alison
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Post by alison on Mar 2, 2015 14:44:50 GMT
I'm one of those who don't see any need for a secondary market. The loans on FS are in general all short term loans for six months and only have small investment limits anyway. If someone really needs to access that money within the six months then I'd suggest p2p lending wasn't really suitable and they'd be better off with bank deposits or sticking their money under the mattress. The only reason I can see for a secondary market is to divest possibly defaulting loans a few days before maturity as a means of risk removal. I'm one of those who do feel a secondary market would be helpful -- to me, other investors, and FS. I'm happy to let most of my FS investments run for their full term. But they weren't all subject to small investment limits, so I have some large FS investments as well, and I would like to be able to diversify my portfolio by using some of the money tied up in those to invest in new opportunities as they come available. I expect that newer FS investors also would like to be able to build up a diversified portfolio more quickly than is possible currently, and a secondary market would enable that. I agree with Nick Mike.
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