Post by ablrate on Apr 1, 2015 8:56:13 GMT
Apr 1, 2015 4:05:53 GMT james said:
Thanks for that initial structure discussion. Would you mind no describing all potential conflicts of interest involved in the relationships between the various companies, their owners and us as lenders?For example, it is my impression that the founder of the leasing business has helped to arrange to set up Ablrate in part to provide e funding for the aircraft leasing business and hence there is a conflict of interest there between founder's interests and lender's interests. Such conflits of interest aren't inherently problematic provided they are disclosed and understood by all parties. In this case one of the potential effects is a difference in objectives for interest rats, with the leasing firm wanting lower rates to reduce costs while the lenders would want higher rates to increase their profits. meanwhile ablrate itself could have an interest in either increasing or decreasing rates depending on the dominant revenue sources and whether that favours more lending via initial fees or less lending at higher rates based on a cut of lender revenue.
I also assume that the ownership between the leasing business and Ablrate is similar, that the interests of the leasing business and Ablrate might be considered to be well aligned, with any ownership mismatch being by those who do not have a controlling interest in the Ablrate businesses. In turn this may mean that the leasing business owners may have an incentive to send funding requests via ablrate, both as a potentially lowest cost source of funding and to develop the Ablrate business so that it may in the future provide more of their funding needs.
So, as part of such disclosures, it would be very useful and appropriate to know the names of each director and their directorship or management roles in the other related businesses, as well as their ownership percentage in each of these businesses, so that there is transparency of ownership and interest.
Naturally enough I don't consider anything I know of the structure today to be problematic and am happy to invest with what I know, but I do have a strong interest in full disclosure so that nobody gets surprised later. As with politics, I don't think the interests are a problem, but do think that not being open about them could be one.
Thanks for the question.
Phoenix own shares in Ablrate (via ATC the owner of ablrate), but there are no cross shareholdings in Phoenix. You are right that Phoenix are incentivised to send us business as their shareholding is significant at 30% but not a controlling interest. None of the directors of ATC have shares in Phoenix or management of their businesses other than where appointed to the board of SPVs to protect the interests of lenders.
It is important to say that Ablrate was formed, not necessarily to ride the wave of the p2p boom, but to solve a problem in the space in which we operate so close partnerships with professional businesses are necessary. Tony Griffin has been involved in the industry for 40 years and is an innovator, he was instrumental in creating the 'operating lease' for aircraft as we know it now. He grasped the Ablrate concept from the moment it was pitched, as a solution to issues his business and industry was facing. He could not be more supportive and professional in his dealings with Ablrate.
Hope that answers your question James.
Regards
Ablrate