|
|
GBBA
Aug 5, 2015 12:28:01 GMT
Post by chielamangus on Aug 5, 2015 12:28:01 GMT
I am interested in how the GBBA interacts with and affects the MLIA, since the latter is my interest. I read the description but was still not clear, so have put a little bit into the GBBA to see what happens. I see it buys up those loans where there is current availability (usually the ones I try to avoid!). Does it put a target on all qualifying loans and will it then try to sell some of those bought initially (and in the harder to sell category) in order to buy those in higher demand? And if there is a target on different loans, where can I find out what that target is and which loans are in the list? Also, where is the secondary market for GBBA units? [Edit - OK, just found it. It's a withdrawal and then one waits. Since units purchased were the ones with plenty of supply on the market, it could take a while for the GBBA units to be sold.] And where is the total market size for the GBBA? Any ideas anyone? Edit one hour later: I put half my GBBA units up for sale. Some went in the first minute, and half went within 30 minutes. So the GBBA is rather more liquid than the MLIA, and one of my initial conclusions above is wrong. chris How much priority is given to GBBA sales over MLIA ones? Can we have an insight into this so we can see how it affects our MLIA liquidity? |
|
|
|
GBBA
Aug 5, 2015 14:08:13 GMT
Post by chris on Aug 5, 2015 14:08:13 GMT
chielamangusCurrently GBBA has no priority but that will be changing with the next software release whereby investment accounts will be given some level of priority, but that will be balanced by the MLIA having discounts (and possibly premiums). All trades will still happen in the same marketplace it's just the products will get a greater share of sales and purchases at par. Exact weighting to be determined, and will likely be tweaked as we see real world usage to make sure that MLIA retains reasonable liquidity even at par. The algorithm is currently being rewritten for release in the next couple of weeks so not much point documenting it as is.
|
|
pikestaff
Member of DD Central
Posts: 2,187 
Likes: 1,546
|
GBBA
Aug 5, 2015 22:18:09 GMT
Post by pikestaff on Aug 5, 2015 22:18:09 GMT
chris, another question. The description of the GBBA says that it will invest in loans "to UK SME businesses" that meet specified criteria (but not in loans elibible for the GEIA). Can you clarify what AC means by an SME business? Are there any types of borrower on AC that are not "SME businesses"? The more that I think about this the harder it gets to know where to draw the line. For example: - is a sole trader an SME or not? - is a property developer an SME or not? - is a buy to let investor an SME or not? - does the answer to any of all of the above depend on whether the borrower is a company or an individual?
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,330
Likes: 11,549
|
GBBA
Aug 6, 2015 0:28:14 GMT
Post by ilmoro on Aug 6, 2015 0:28:14 GMT
First attack of GEIA like indecision today. Its swapped 30p between the same two loans 3 times today for no obvious reason. As I dont invest in the GEIA this randomness is all new & exciting for me  |
|
|
|
Post by stuartassetzcapital on Aug 6, 2015 7:54:09 GMT
chris, another question. The description of the GBBA says that it will invest in loans "to UK SME businesses" that meet specified criteria (but not in loans elibible for the GEIA). Can you clarify what AC means by an SME business? Are there any types of borrower on AC that are not "SME businesses"? The more that I think about this the harder it gets to know where to draw the line. For example: - is a sole trader an SME or not? - is a property developer an SME or not? - is a buy to let investor an SME or not? - does the answer to any of all of the above depend on whether the borrower is a company or an individual? In answer to your questions, we use simple Government definitions of a business with up to 250 employees. Micro, small and medium businesses come under SME with Micro making up c 99% of the total. This includes sole traders and individuals in some cases provided the loan is for business purposes only. A property developer is running an HMRC defined trading activity and is an SME. A Buy to Let Investor is not an SME and is excluded. We will look at a separate BTL account in due course. The over-riding requirement to enter the GBBA bar being a business loan to an SME is for the LTV test of 75% or lower to be passed using only any property security under the loan for the test. GBBA ignores all other security. A loan might be 20% LTV with stock, machinery etc but would fail the test as we only look at property backed loans in Series 1 of the GBBA for security purposes. Our lenders wanted simplicity and double security of property backed loans only and also a provision fund so that's where the GBBA Series 1 came from. We know there is also a demand for a highly liquid / quick access account paying a competitive rate and we are in progress on such a solution with very high liquidity and will reveal all in due course.
|
|
|
|
Post by stuartassetzcapital on Aug 6, 2015 7:58:54 GMT
First attack of GEIA like indecision today. Its swapped 30p between the same two loans 3 times today for no obvious reason. As I dont invest in the GEIA this randomness is all new & exciting for me In large scale computer problems such as diversifying the account in a multi-dimensional constraint set and with multiple supply/demand factors one method of solution is Genetic algorithms which introduce randomness to quickly and efficiently find good solutions in preference to processor intensive brute force algorithms that may not even be possible to code. The randomness is intentional and part of making the system work well and quickly. en.wikipedia.org/wiki/Genetic_algorithm We aren't just bankers and credit geeks 
|
|
baldpate
Member of DD Central
Posts: 549
Likes: 407
|
Post by baldpate on Aug 6, 2015 9:54:43 GMT
... We know there is also a demand for a highly liquid / quick access account paying a competitive rate and we are in progress on such a solution with very high liquidity and will reveal all in due course. I look forward to this one. It will become particularly important for me when you are able to offer an IFISA wrapper, since I hope to transfer a good chunk of 'old' ISA money, currently in cash/equity, into P2P. Any platform which offers a liquid 'parking' place for such funds until they can be redeployed into specific loans will immediately have a head start on the competition in my book.
|
|
niceguy37
Member of DD Central
Posts: 504
Likes: 254
|
GBBA
Aug 6, 2015 10:51:26 GMT
Post by niceguy37 on Aug 6, 2015 10:51:26 GMT
... We know there is also a demand for a highly liquid / quick access account paying a competitive rate and we are in progress on such a solution with very high liquidity and will reveal all in due course. I look forward to this one. It will become particularly important for me when you are able to offer an IFISA wrapper, since I hope to transfer a good chunk of 'old' ISA money, currently in cash/equity, into P2P. Any platform which offers a liquid 'parking' place for such funds until they can be redeployed into specific loans will immediately have a head start on the competition in my book. Indeed. Whilst AC is an excellent P2P site, I wish there was a way to keep a liquid or cash reserve in order to buy up loans as they are drawn down, or hard-to-come-by loans as they come up.
|
|
paulgul
Member of DD Central
Posts: 401
Likes: 92
|
GBBA
Aug 6, 2015 12:28:14 GMT
Post by paulgul on Aug 6, 2015 12:28:14 GMT
Referring to this document www.assetzcapital.co.uk/our-investor-accounts/gb-account/under the key features it states "Interest (income) is earned monthly but not all loans pay monthly interest so it may be accrued on a limited number of loans for payment at the same time as the loan is repaid"so are you saying in some cases (but we don't know how many) we will have to wait until the loan is repaid before we see any interest payment, as some of the loans may be up to 5 years (also in the key features) this means possibly a large chunk of money tied up but producing no monthly return - or have I read this whole statement wrong? |
|
|
|
GBBA
Aug 6, 2015 14:30:42 GMT
Post by chris on Aug 6, 2015 14:30:42 GMT
Referring to this document www.assetzcapital.co.uk/our-investor-accounts/gb-account/under the key features it states "Interest (income) is earned monthly but not all loans pay monthly interest so it may be accrued on a limited number of loans for payment at the same time as the loan is repaid"so are you saying in some cases (but we don't know how many) we will have to wait until the loan is repaid before we see any interest payment, as some of the loans may be up to 5 years (also in the key features) this means possibly a large chunk of money tied up but producing no monthly return - or have I read this whole statement wrong? You've read it right but typically loans that don't feature interest repayments are shorter term loans, and whilst they're not producing monthly repayments they're still giving a monthly return in accrued interest.
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
|
GBBA
Aug 6, 2015 14:38:48 GMT
Post by merlin on Aug 6, 2015 14:38:48 GMT
Referring to this document www.assetzcapital.co.uk/our-investor-accounts/gb-account/under the key features it states "Interest (income) is earned monthly but not all loans pay monthly interest so it may be accrued on a limited number of loans for payment at the same time as the loan is repaid"so are you saying in some cases (but we don't know how many) we will have to wait until the loan is repaid before we see any interest payment, as some of the loans may be up to 5 years (also in the key features) this means possibly a large chunk of money tied up but producing no monthly return - or have I read this whole statement wrong? You've read it right but typically loans that don't feature interest repayments are shorter term loans, and whilst they're not producing monthly repayments they're still giving a monthly return in accrued interest. But not in compounded interest!!!!!
|
|
|
|
GBBA
Aug 6, 2015 14:50:50 GMT
Post by chris on Aug 6, 2015 14:50:50 GMT
You've read it right but typically loans that don't feature interest repayments are shorter term loans, and whilst they're not producing monthly repayments they're still giving a monthly return in accrued interest. But not in compounded interest!!!!! And what's the difference in return rate on that over a 6 month term, for example? It's less than 0.1% pa isn't it?
|
|
|
|
GBBA
Aug 6, 2015 15:04:37 GMT
Post by stuartassetzcapital on Aug 6, 2015 15:04:37 GMT
But not in compounded interest!!!!! And what's the difference in return rate on that over a 6 month term, for example? It's less than 0.1% pa isn't it? We expect only a modest number of deferred interest loans and they will be short term as Chris says - yes not compounding but minor effect overall for the sake for 1-12 months typically of a small part of the portfolio. Sales out of GBBA will still accrue the correct interest for the term of hold and it will come in later even if you sell out today.
|
|
paulgul
Member of DD Central
Posts: 401
Likes: 92
|
GBBA
Aug 6, 2015 16:36:47 GMT
Post by paulgul on Aug 6, 2015 16:36:47 GMT
Referring to this document www.assetzcapital.co.uk/our-investor-accounts/gb-account/under the key features it states "Interest (income) is earned monthly but not all loans pay monthly interest so it may be accrued on a limited number of loans for payment at the same time as the loan is repaid"so are you saying in some cases (but we don't know how many) we will have to wait until the loan is repaid before we see any interest payment, as some of the loans may be up to 5 years (also in the key features) this means possibly a large chunk of money tied up but producing no monthly return - or have I read this whole statement wrong? You've read it right but typically loans that don't feature interest repayments are shorter term loans, and whilst they're not producing monthly repayments they're still giving a monthly return in accrued interest. So what happens if an investment includes some of these loans but the investor, for whatever reason, decides to dispose of their entire GBBA holding, do they loose out completely on that segment of interest
|
|
|
|
GBBA
Aug 6, 2015 16:41:46 GMT
Post by stuartassetzcapital on Aug 6, 2015 16:41:46 GMT
You've read it right but typically loans that don't feature interest repayments are shorter term loans, and whilst they're not producing monthly repayments they're still giving a monthly return in accrued interest. So what happens if an investment includes some of these loans but the investor, for whatever reason, decides to dispose of their entire GBBA holding, do they loose out completely on that segment of interest No because doing that would be unfair and we don't do unfair. You would receive your pro rata interest later when it comes in even if you have sold out earlier. Fairer, Growth, Together.
|
|
