registerme
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Post by registerme on Sept 2, 2015 8:46:40 GMT
Perhaps I've missed it in that update, but did it say anything about Autobid buying loan parts on the sm at a discount? I don't see it directly but I assume the sentence "2. The gross interest rates you have set in your current Autobid settings will remain in place for when you buy loan parts from other investors." implies that you will be able to set SM Autobid rates at higher than the fixed rates for new auctions. For post-change loans, such rates could only be achieved by discounting. Certainly the employee who called me yesterday stated clearly that discounting up to 20% would now be possible (versus the current 3%) and that Autobid would be permitted to buy discounted parts, but still NOT those listed with a premium. So the best (only?) way to get a bit of extra squeeze is going to be to bot / autobid the SM for big discounts?
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Post by nickthefool on Sept 2, 2015 8:47:07 GMT
Announcement now live on the website: link New fixed rates table: The resulting projected net returns make interesting (!?) reading: Perhaps I've missed it in that update, but did it say anything about Autobid buying loan parts on the sm at a discount? For some reason it's hidden in the FAQ at static.fundingcircle.com/files/uk/information-packs/fixed-rate-qa-84147df3.pdfTo me that implies autobid still won't be able to buy parts at a premium.
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Post by nickthefool on Sept 2, 2015 8:48:37 GMT
I don't see it directly but I assume the sentence "2. The gross interest rates you have set in your current Autobid settings will remain in place for when you buy loan parts from other investors." implies that you will be able to set SM Autobid rates at higher than the fixed rates for new auctions. For post-change loans, such rates could only be achieved by discounting. Certainly the employee who called me yesterday stated clearly that discounting up to 20% would now be possible (versus the current 3%) and that Autobid would be permitted to buy discounted parts, but still NOT those listed with a premium. So the best (only?) way to get a bit of extra squeeze is going to be to bot / autobid the SM for big discounts? Unless there's some cashback available.
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arbster
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Post by arbster on Sept 2, 2015 8:49:51 GMT
To me that implies autobid still won't be able to buy parts at a premium. Agreed.
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registerme
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Post by registerme on Sept 2, 2015 8:57:05 GMT
On the FAQ about the change they're inviting feedback, which I'm not inclined to give as I don't think it'll make any difference. However, they are also inviting people to an Investor Evening on 17th September. Sadly I can't make this one, but would be interested if anyone from the forum was to go along and ask questions. I'm not terribly happy with the fixed rates they're offering now - the B and C rates in particular are below my personal threshold for investment in that risk band. I replied:- I am happy about nothing. I am concerned about everything. I am confused by nothing. Given that, even though I asked for an invite to the event on the 17th, I suspect I may not get one  .
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TitoPuente
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Post by TitoPuente on Sept 2, 2015 8:58:47 GMT
"We recognise there are a group of investors, who actively use the auction model to earn above average returns, who will be unhappy with this news, and whose overall return is likely to decline as a result".
At least the admit it in writing.
They will not see me around for long.
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registerme
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Post by registerme on Sept 2, 2015 9:00:18 GMT
To me that implies autobid still won't be able to buy parts at a premium. Agreed. Well, seeing as you won't, in future, be able to snag juicier bits of a particular loan at auction there's going to be fairly limited scope to pick up things that would sell at a premium. By definition, in the primary market, you're unlikely to be any better off than anybody else using autobid to play the FC lottery.
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adrianc
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Post by adrianc on Sept 2, 2015 9:10:36 GMT
I don't think it will be particularly great for the Autobiddy, though.
Every loan in a band is NOT the same risk (term notwithstanding). We know there are loans that we look at and scratch our head trying to figure out why the band has been given. Sometimes, too good a band - avoid like the plague. Sometimes, too bad a band - thank you very much.
So... all the active investors are going to be flooding towards the loans perceived as under-banded, leaving the over-banded loans to Autobiddy.
Of course, that presupposes there are any active investors left...
Good to see that they're actually launching it in their usual Faintly Comical style.
15435, launched 18.36 on 1st - fixed rate. A+, 36mo, £36k, 8%
15440, launched 9.56 on 2nd - auction.
Mind you, 15435 is a secured asset, so it might just be coincidence that it's fixed at around the time this is all coming out.
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Post by flx123 on Sept 2, 2015 9:13:02 GMT
Plus the new rates are even below the current market average. Except for D loanes.
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am
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Post by am on Sept 2, 2015 9:17:38 GMT
"We recognise there are a group of investors, who actively use the auction model to earn above average returns, who will be unhappy with this news, and whose overall return is likely to decline as a result". At least the admit it in writing. They will not see me around for long. They say that 29% of investors will be worse off. The question that comes to mind is what proportion of the non-institutional money is provided by that 29%. (I think that I'm a small investor in P2P, but, unless they're padding their count of investors, I'm quite possibly above the FC mean, and very likely over the median and mode.)
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Post by betterthanworking on Sept 2, 2015 9:25:17 GMT
So, what action to take now? Well, for a start, I've just pulled all of my par sales that are above the new stated rates. It seems probable that I'll get more for them next month. Now, I think I'll go shopping on the secondary market.
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oldgrumpy
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Post by oldgrumpy on Sept 2, 2015 9:27:21 GMT
I wonder if 29% of (current) investors will now opt out (presumably they being the savvy ones).
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Post by nickthefool on Sept 2, 2015 9:39:58 GMT
I guess in the short term anything you can pick up that's ~0.5% or more above what the new fixed rate will be, should be fairly easy to shift on the SM for a profit once the fixed rates have kicked in. There is a lot currently available on the SM in that category, I wonder if people will withdraw it when they learn about the change or not. Or whether the bigger players will hoover it all up.
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SteveT
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Post by SteveT on Sept 2, 2015 9:41:26 GMT
I guess in the short term anything you can pick up that's ~0.5% or more above what the new fixed rate will be, should be fairly easy to shift on the SM for a profit once the fixed rates have kicked in. There is a lot currently available on the SM in that category, I wonder if people will withdraw it when they learn about the change or not. Or whether the bigger players will hoover it all up. Judging by how quickly the remaining SME parts I've got listed on the SM are flying out this morning, the great SM buy-up has already begun.
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registerme
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Post by registerme on Sept 2, 2015 9:42:32 GMT
So I had a quick read of their Fixed Rate Q&A. The bit that caught my eye was this:- " How are the interest rates set?
Fixed interest rates will be based on a number of inputs, including macroeconomic trends, expected loss rates, volatility of returns and comparisons with the wider market for pricing business loans. " No mention of demand for loans, or supply of investable funds unless it is Fungibly Camouflaged in that comment about the "wider market for pricing business loans"..... |
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