am
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Post by am on Sept 2, 2015 11:36:11 GMT
Time to resurrect this thread? For the first time since I started with Funds Crumbling two years ago, I have withdrawn money instead of putting more in. Where are others heading to? FC positive points are 1) because it's larger scale and well capitalised it has (IMHO) a lower platform risk than many of the competitors 2) there is enough deal flow to maintain a well-diversified loan portfolio in terms of exposure to individual lenders 3) low minimum bids mean that diversification can be achieved without having a huge amount of capital deployed 4) it is (or was) fairly liquid The switch to fixed rate was foreseeable, and I don't think that it should be a dealbreaker. What is a potential issue is the effect it has on liquidity (which I think had been declining anyway).
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Post by Deleted on Sept 2, 2015 11:43:11 GMT
Now that the interesting (sic) people will be moving out of FC we will need a new portal to play with. I'm going to assume everyone has a bit of AC, MT, RS, FS just because they are simple enough for me to understand, I understand that some of them have had their problems (defaults, software etc) some of which I have encountered in the past year , however assuming I need a new portal can you give me advice on how the following face up on 1) Defaults 2) Software complexity/quality 3) Loan flow a) SS b) FK c) ABL rate d) ReBS e) LC f) TC Advice anyone?  |
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sl75
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Post by sl75 on Sept 2, 2015 12:14:55 GMT
I have been withdrawing for over a year; I joined hoping to use the API. I won't withdraw any cash for the next few weeks and once the dust settles I will consider my position, maybe I will give them another go. I don't know what the rates will look like but risk reward vs effort might just have swung in the right direction. The rates are detailed on the "how will they work" tab of www.fundingcircle.com/uk/fixedrate/
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Post by GSV3MIaC on Sept 2, 2015 12:17:00 GMT
And are, in almost all cases, lower than even a moderately active bidder could achieve ... even using autobid you could have done better in most cases ..
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bigfoot12
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Post by bigfoot12 on Sept 2, 2015 12:32:46 GMT
I have been withdrawing for over a year; I joined hoping to use the API. I won't withdraw any cash for the next few weeks and once the dust settles I will consider my position, maybe I will give them another go. I don't know what the rates will look like but risk reward vs effort might just have swung in the right direction. The rates are detailed on the "how will they work" tab of www.fundingcircle.com/uk/fixedrate/Since my original I have also received a copy of the new rates in the post. I think the autobid is useless, I was hoping that it would be changing but there is nothing I have read to indicate that. If it forces me to buy loans on the secondary market and I have no control over the duration of the loan then it is no good for me. At the moment there are 35 ish available auctions. What will be interesting to see is how many will there be in one month.
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nick
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Post by nick on Sept 2, 2015 15:42:17 GMT
Since my original I have also received a copy of the new rates in the post. I think the autobid is useless, I was hoping that it would be changing but there is nothing I have read to indicate that. If it forces me to buy loans on the secondary market and I have no control over the duration of the loan then it is no good for me. At the moment there are 35 ish available auctions. What will be interesting to see is how many will there be in one month. Normally the live auction tally is 50-70 so I suspect they have cut back supply in the run up to the change to ensure penalty of demand at the start of the new regime. Will be interesting to see how it plays out. I think there is a real risk of it being a disaster. Launching with higher rates initially and paring these back would surely have been the lower risk approach for them.
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arbster
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Post by arbster on Sept 2, 2015 16:15:45 GMT
We should also consider how all of this feels to their borrowers. How would companies feel if they were the last of the 10% A+ SME loans, and see their competitors getting much lower rates next week? I suspect this is why there are only small loans on the market now - they typically fill at or below average regardless of the information provided by FC, simply due to the volume of autobidders at around MBR. Similarly, they couldn't start with high fixed rates simply to appease lenders, as it would have the reverse effect on borrowers. They needed to tread a fine line, but once they see loans failing to fill, they'll either raise rates (justifiably) or add cashback to oil the wheels, depending on how severe the issue is.
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am
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Post by am on Sept 2, 2015 16:22:20 GMT
Since my original I have also received a copy of the new rates in the post. I think the autobid is useless, I was hoping that it would be changing but there is nothing I have read to indicate that. If it forces me to buy loans on the secondary market and I have no control over the duration of the loan then it is no good for me. At the moment there are 35 ish available auctions. What will be interesting to see is how many will there be in one month. Normally the live auction tally is 50-70 so I suspect they have cut back supply in the run up to the change to ensure penalty of demand at the start of the new regime. Will be interesting to see how it plays out. I think there is a real risk of it being a disaster. Launching with higher rates initially and paring these back would surely have been the lower risk approach for them. It depends on how good FC's understanding of their ecosystem is. They've got more data available that we do, so they should understand it better than we do, and presumably think they can handle the expected cash outflows. whether they're relying on lenders having nowhere else to go, or on institutions taking up the slack, or whatever.
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mikeb
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Post by mikeb on Sept 2, 2015 18:36:03 GMT
The switch to fixed rate was foreseeable, and I don't think that it should be a dealbreaker. The fixed rate isn't entirely the deal breaker. It's the rate they've fixed at.
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nick
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Post by nick on Sept 3, 2015 10:40:22 GMT
Normally the live auction tally is 50-70 so I suspect they have cut back supply in the run up to the change to ensure penalty of demand at the start of the new regime. Will be interesting to see how it plays out. I think there is a real risk of it being a disaster. Launching with higher rates initially and paring these back would surely have been the lower risk approach for them. It depends on how good FC's understanding of their ecosystem is. They've got more data available that we do, so they should understand it better than we do, and presumably think they can handle the expected cash outflows. whether they're relying on lenders having nowhere else to go, or on institutions taking up the slack, or whatever. Well if their understanding of their ecosystems is as good as their understanding of their IT systems I guess we have nothing to worry about 
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nick
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Post by nick on Sept 9, 2015 16:56:29 GMT
In respect of alternatives to FC for active investors, ie the chance to flip on a secondary market, how do other platforms stack up? I'm mostly deployed on FC and REBS. I'm very active on FC, but REBS has actually yielded me a higher return, albeit with a higher degree of risk as I believe their risk rating is very immature (eg no forecast/expected default rates by band) and the secondary market is a lot less liquid.
I have previously looked at Fundingknight about a year ago, but deal flow was very low. Is anyone active on FK, if so, how does it compare to FC in terms of deal flow and liquidity in the SM. I'm going to have to do the research, but if anyone could give me a heads up I would at least know whether its worth the effort now or leaving it another year.........
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SteveT
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Post by SteveT on Sept 9, 2015 16:59:05 GMT
In respect of alternatives to FC for active investors, ie the chance to flip on a secondary market, how do other platforms stack up? I'm mostly deployed on FC and REBS. I'm very active on FC, but REBS has actually yielded me a higher return, albeit with a higher degree of risk as I believe their risk rating is very immature (eg no forecast/expected default rates by band) and the secondary market is a lot less liquid. I have previously looked at Fundingknight about a year ago, but deal flow was very low. Is anyone active on FK, if so, how does it compare to FC in terms of deal flow and liquidity in the SM. I'm going to have to do the research, but if anyone could give me a heads up I would at least know whether its worth the effort now or leaving it another year......... I dabbled for a few weeks before realising the "auctions" are a sham (everyone gets the same rate) and that the SM is even more comatose than ReBS. Have now exited stage right.
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oldgrumpy
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Post by oldgrumpy on Sept 9, 2015 17:05:23 GMT
FK deal flow is still very slow. Their rates can be compared with FC, but unlike FC they do not take a 1% lender fee. FK is nominally an auction, but in reality it is fixed rate, and you nearly always get matched at the reserve rate, or that minus 0.01%. Underwriters make sure the reserve rate is accomplished, and drawdown is immediately the auction ends.
FK have just reduced their expensive 1% fee on selling through the secondary market to 0.5%, which is still double that of FC.
When loans become "stressed" or default FK send out a lot of information to explain what is going on.
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grahamg
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Post by grahamg on Sept 9, 2015 18:33:39 GMT
On the jumping ship theme i don't see a big rush. With FC there is four/five years of loan book (over 12000 loans) to pick over on the SM as others jump ship, hopefully at discounts. Thats if you are holding rather than flipping.
So slow run down.
Also having diversified on FC no need to do the same on other individual platforms. Just need to keep a diversified holding over all active platforms
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jimbo
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Post by jimbo on Sept 10, 2015 4:40:18 GMT
I like FKs operation, their UI and especially the new website design. Deal flow has improved this year but is even now only around three - five loans per month. If they could only triple this then I think they could represent an attractive alternative to FC; especially if GLI - the part owner - scale down their underwriting activities as user numbers rise.
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