ben
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Post by ben on Dec 8, 2015 7:40:55 GMT
better be quick 2.07p available to put in, form an orderly line now please
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ianb
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Post by ianb on Dec 8, 2015 14:07:19 GMT
I may be being very dim here (in which case apologies...) but arent these increases in the QAA fund size to the detriment of investors ? As i understand it (maybe wrongly) theres now £3m of loan units funding the QAA which are unavailable to the MLIA. So investors receive the 3.75% rate instead of the real rate of say 9.75%, and AC pocket the fairly substantial difference. i know that sales of some loans are siphoned away from MLIA investors whenever they become available so there isnt an earthly chance of increasing a holding in many of the existing loans (Chris declined to comment on this about 10 days ago) and i would guess a good amount of them end up in the QAA. So the secondary market on many loans is now dead, while the QAA increases, which is good for AC but bad for investors. Maybe i've got the wrong end of the stick here, but seems to me like MLIA investors are being stitched up.
No, i'm not in the QAA, i'd rather take out my cash and move it elsewhere to get a decent rate.
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SteveT
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Post by SteveT on Dec 8, 2015 14:14:30 GMT
I may be being very dim here (in which case apologies...) but arent these increases in the QAA fund size to the detriment of investors ? As i understand it (maybe wrongly) theres now £3m of loan units funding the QAA which are unavailable to the MLIA. So investors receive the 3.75% rate instead of the real rate of say 9.75%, and AC pocket the fairly substantial difference. i know that sales of some loans are siphoned away from MLIA investors whenever they become available so there isnt an earthly chance of increasing a holding in many of the existing loans (Chris declined to comment on this about 10 days ago) and i would guess a good amount of them end up in the QAA. So the secondary market on many loans is now dead, while the QAA increases, which is good for AC but bad for investors. Maybe i've got the wrong end of the stick here, but seems to me like MLIA investors are being stitched up. No, i'm not in the QAA, i'd rather take out my cash and move it elsewhere to get a decent rate. On the other hand, at last there are some new loans coming through, albeit at the smaller and lower-rate end of the spectrum. If access to low cost "underwriting" in the guise of the QAA is helping AC be more competitive in winning business in this space (using large wads of DART money at 3.75% to do it) then that's fine by me.
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Post by chris on Dec 8, 2015 14:57:57 GMT
I may be being very dim here (in which case apologies...) but arent these increases in the QAA fund size to the detriment of investors ? As i understand it (maybe wrongly) theres now £3m of loan units funding the QAA which are unavailable to the MLIA. So investors receive the 3.75% rate instead of the real rate of say 9.75%, and AC pocket the fairly substantial difference. i know that sales of some loans are siphoned away from MLIA investors whenever they become available so there isnt an earthly chance of increasing a holding in many of the existing loans (Chris declined to comment on this about 10 days ago) and i would guess a good amount of them end up in the QAA. So the secondary market on many loans is now dead, while the QAA increases, which is good for AC but bad for investors. Maybe i've got the wrong end of the stick here, but seems to me like MLIA investors are being stitched up. No, i'm not in the QAA, i'd rather take out my cash and move it elsewhere to get a decent rate. On the other hand, at last there are some new loans coming through, albeit at the smaller and lower-rate end of the spectrum. If access to low cost "underwriting" in the guise of the QAA is helping AC be more competitive in winning business in this space (using large wads of DART money at 3.75% to do it) then that's fine by me. The QAA is a complex instrument and detailing it's use gives away competitive advantage that we're not consciously doing at the moment. Probably over time it will become more transparent in operation but for now it's considered more of a hands off investment account. At any one time far less than 100% of the account is invested in loans, typically closer to 50% so far but that does fluctuate as we grow the account and therefore need to build up an interest buffer. Any surplus interest over what is paid out to lenders goes into the provision fund on the account. So there's no excess going to AC. What I will say about the operation of the account is that it's not an accident that there has been an uptick in loans following the launch and growth of the QAA, and that the account is intended to open investing opportunity for all lenders not just those that participate directly. It's also an attractive investment account in it's own right and several lenders have already invested up to the new £75k combined cap.
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Post by Ton ⓉⓞⓃ on Dec 8, 2015 15:04:37 GMT
ianb I think what you say is correct but I see what you say as one half of the situation. Presumably QAA will hit a limit at some point and stop sucking up most the shrapnel. Early on it was said the target was £3-4 million. I think of the QAA as a quick fingered Lender or Underwriter, it's more competition for us but it's not disastrous. I've not done the maths I'd guess it might take a year+ for the QAA to fill the pf, whereupon it's just possible the rate might actually increase that's paid out to Lenders, as this is re-assessed every month to see what should be paid out. To give the other view...
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Post by yorkshireman on Dec 8, 2015 20:49:29 GMT
The QAA is a complex instrument Sure is.
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mikes1531
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Post by mikes1531 on Dec 8, 2015 21:31:07 GMT
I've not done the maths I'd guess it might take a year+ for the QAA to fill the pf, whereupon it's just possible the rate might actually increase that's paid out to Lenders... I really doubt AC would increase the 3.75% rate as long as the QAA continues to attract more investment than AC can deploy -- which is why they've had to set limits on investing. Another possibility could be that, once the PF is funded, AC use the difference between what the QAA earns and what the QAA pays out as interest to improve their bottom line. That could be a very positive thing for AC's investors -- both for those who lend, because the platform is more robust, and for those who have supported AC's equity funding because the QAA improves the platform's profitability and value. Disclosure: I am one of those who have supported the equity funding.
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sl75
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Post by sl75 on Dec 9, 2015 10:13:16 GMT
Another possibility could be that, once the PF is funded, AC use the difference between what the QAA earns and what the QAA pays out as interest to improve its bottom line. That could be a very positive thing for AC's investors -- both for those who lend, because the platform is more robust, and for those who have supported AC's equity funding because the QAA improves the platform's profitability and value. ... or indeed they could arrange to reduce the difference by reducing the amount that borrowers pay on future loans, thereby improving its attractiveness to a wider range of borrowers, and increasing the deal flow from which AC and its shareholders can extract revenue. The main losers then would investors via the MLIA.
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bigfoot12
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Post by bigfoot12 on Dec 9, 2015 10:32:23 GMT
Another possibility could be that, once the PF is funded, AC use the difference between what the QAA earns and what the QAA pays out as interest to improve its bottom line. That could be a very positive thing for AC's investors -- both for those who lend, because the platform is more robust, and for those who have supported AC's equity funding because the QAA improves the platform's profitability and value. ... or indeed they could arrange to reduce the difference by reducing the amount that borrowers pay on future loans, thereby improving its attractiveness to a wider range of borrowers, and increasing the deal flow from which AC and its shareholders can extract revenue. The main losers then would investors via the MLIA. My guess is that any of this is years away. Assuming they do manage to bring some new loans AC will want to expand for several years to come, and so the provision fund is going to require more money for most of that time. I don't think that RS has managed much of reduction of the proportion paid into its fund even after 5 years.
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Post by pepperpot on Dec 9, 2015 10:33:35 GMT
Another possibility could be that, once the PF is funded, AC use the difference between what the QAA earns and what the QAA pays out as interest to improve its bottom line. That could be a very positive thing for AC's investors -- both for those who lend, because the platform is more robust, and for those who have supported AC's equity funding because the QAA improves the platform's profitability and value. ... or indeed they could arrange to reduce the difference by reducing the amount that borrowers pay on future loans, thereby improving its attractiveness to a wider range of borrowers, and increasing the deal flow from which AC and its shareholders can extract revenue. The main losers then would investors via the MLIA. Absolutely fine, bring on the 8/9% loans to feed QAA, but why should it impact on the flow of 10% and above as a basket of rates on offer for MLIA? One thing I found a bit perplexing is when the institutions came on board with their preference for smaller loans (possibly also aiming for the safer c9% area), is why that should have put a nail in the coffin of larger £1m+ deals that were being eaten up quite readily by manual investors? Maybe the whole team needed to focus on delivery of the smaller loans (more loans = more origination work), but wouldn't the team expansion following the raise have allowed both avenues to grow?
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Post by chris on Dec 9, 2015 11:12:20 GMT
... or indeed they could arrange to reduce the difference by reducing the amount that borrowers pay on future loans, thereby improving its attractiveness to a wider range of borrowers, and increasing the deal flow from which AC and its shareholders can extract revenue. The main losers then would investors via the MLIA. Absolutely fine, bring on the 8/9% loans to feed QAA, but why should it impact on the flow of 10% and above as a basket of rates on offer for MLIA? One thing I found a bit perplexing is when the institutions came on board with their preference for smaller loans (possibly also aiming for the safer c9% area), is why that should have put a nail in the coffin of larger £1m+ deals that were being eaten up quite readily by manual investors? Maybe the whole team needed to focus on delivery of the smaller loans (more loans = more origination work), but wouldn't the team expansion following the raise have allowed both avenues to grow? Partly the focus of the team, partly the messaging to origination sources, partly other factors such as the cost of underwriting large deals inflating. We've hired new resource now and appear to be nailing the origination work from both a marketing and sales perspective, alongside all the other internal changes we've made to things like our pricing model and borrower proposition. Each of the stages in the loan pipeline are currently going through their own hockey stick upturn now, starting with inbound enquiries, then the next stage following a couple of weeks later, and so on. We're not there yet and there is absolutely no complacency in the team but the signs are good and the end result should be a wider range of loans on offer covering a wider range of loan sizes and risk profiles (and therefore rates).
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Investboy
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Trying to recover from P2P revolution
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Post by Investboy on Dec 11, 2015 9:46:28 GMT
It looks the limit has been increased:
£3,500,000 - Current account cap
£3,297,956 - Total QAA investment
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jonah
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Post by jonah on Dec 11, 2015 9:56:49 GMT
It looks the limit has been increased: £3,500,000 - Current account cap £3,297,956 - Total QAA investment Assuming that 199 does go live today, added to the above that would give over a million to get into the QAA. It could be that it doesn't fill all of that until tomorrow!
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Post by enzed on Dec 11, 2015 22:45:15 GMT
Could AC give us an indication at what max limit they have in mind for the QAA. I appreciate that AC has to fund the QAA to be able to pay the base rate but think perhaps a slower expansion of the QAA would not have disadvantaged lenders to the extent seen in the past 2 months since QAA went live. My income is seriously down each month as repaid loans are unable to be reinvested at previous rates.
Whilst I think the QAA is great for sweeping up idle funds or as a lesser risk fund I personally believe the QAA should be used for the short term between old loans maturing/being repaid and (hopefully) new loans being launched. To my way of thinking the result has been that whereas previously I was receiving 100% of my investment instructions in loans going live I am now only getting 20-35% of requests as loans appear to being channeled into QAA rather than to individual investors - the 2% received in the Galash***** loan today makes me think it is not worth putting up requests for any new loans until business as normal is resumed.
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mikes1531
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Post by mikes1531 on Dec 12, 2015 0:05:07 GMT
It looks the limit has been increased: £3,500,000 - Current account cap £3,297,956 - Total QAA investment Assuming that 199 does go live today, added to the above that would give over a million to get into the QAA. It could be that it doesn't fill all of that until tomorrow! #199 did go live Friday, but the amount in the QAA doesn't seem to have dropped at all. In fact, at £3.49M right now, it's up nearly £200k in the past 15 hours. Very little of the #199 loan seems to have been funded by lenders' swept QAA money.
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