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Post by davee39 on Mar 20, 2014 19:30:23 GMT
A Corporate Bond fund makes an initial offer to the market and invests the receipts in company bonds. Cash funds do something similar. Both are tradeable.
Assume a P2P bond existed, say 1 million £1 units initially and then invested across the P2P providers.
This would allow investors with modest funds to invest in a professionally managed bond fund and have an exit route if needed.
A downside might be taking the 'P' out of P2P since it would be a corporate entity and would potentially introduce corporate investors.
Would this be good or bad?
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Post by yorkshireman on Mar 20, 2014 22:23:10 GMT
A Corporate Bond fund makes an initial offer to the market and invests the receipts in company bonds. Cash funds do something similar. Both are tradeable. Assume a P2P bond existed, say 1 million £1 units initially and then invested across the P2P providers. This would allow investors with modest funds to invest in a professionally managed bond fund and have an exit route if needed. A downside might be taking the 'P' out of P2P since it would be a corporate entity and would potentially introduce corporate investors. Would this be good or bad? The idea is excellent, the prospect of corporate investors turns me off as you can bet your bottom dollar it wouldn’t take long for the city boys to be manipulating rates to their advantage as they already do in one area of P2P.
I’m not prepared to comment on where that might be as I don’t wish to suffer the same fate as Old Grumpy. 
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Post by wiseclerk on Mar 21, 2014 7:50:08 GMT
There are funds investing in p2p loans.
The only difference to a bond is that they are not tradedable (to my knowledge).
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pikestaff
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Post by pikestaff on Mar 21, 2014 8:56:34 GMT
When p2x is allowed into NISAs, I expect funds of some kind to be the main vehicle. But we shall have to wait and see how it evolves.
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bugs4me
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Post by bugs4me on Mar 21, 2014 10:03:48 GMT
On the surface a good idea but the so called 'professionals' value themselves far more than I do and many IMO do not have a long shelf life - wonder why. But as they would have control of the pot then no doubt they will find a way of skimming off their hidden fees.
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Post by yorkshireman on Mar 21, 2014 11:57:30 GMT
On the surface a good idea but the so called 'professionals' value themselves far more than I do and many IMO do not have a long shelf life - wonder why. But as they would have control of the pot then no doubt they will find a way of skimming off their hidden fees. In essence you’ve said what I said above but in a more erudite manner! 
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jimbo
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Post by jimbo on Mar 23, 2014 9:27:42 GMT
Half the fun of p2p is being able to choose who you lend to on your own terms. Why would I want to buy a bond where that process has been taken out of the equation for me...?
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Post by oldnick on Mar 23, 2014 9:30:55 GMT
Half the fun of p2p is being able to choose who you lend to on your own terms. Why would I want to buy a bond where that process has been taken out of the equation for me...? I'm with you on this, but there are many lenders, it seems, who just want a good income, and have a life!
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Post by davee39 on Mar 23, 2014 9:33:20 GMT
Half the fun of p2p is being able to choose who you lend to on your own terms. Why would I want to buy a bond where that process has been taken out of the equation for me...? One benefit would be for LNWI's (Low net worth individuals) to participate at the professional end where investments in individual loans might be £10 - 25k.
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wysiati
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Post by wysiati on Mar 23, 2014 12:25:03 GMT
ThinCats has already tried to launch a retail lending fund product "ThinCats Bonds" in 2012 in conjunction with an FSA regulated fund manger. It is not clear whether there was much demand but in any case TC confirmed that the venture was blocked by the then FSA as a potential unregulated collective investment scheme. Some of the obstacles may have been removed but issues such as additional fees for actively managed products remain (from both a borrower and lender perspective); one of the TC sponsors was recently bemoaning the '10% minimum rate mentality' of potential lenders pointing out that from a borrower's perspective this already translates (on TC via that sponsor at least) into a funding cost of perhaps 13%+. Adding further layers of fees would be unlikely to improve the availability of higher quality/better secured deals which many lenders claim they would favour.
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j
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Post by j on Mar 23, 2014 13:53:47 GMT
Half the fun of p2p is being able to choose who you lend to on your own terms. Why would I want to buy a bond where that process has been taken out of the equation for me...? One benefit would be for LNWI's (Low net worth individuals) to participate at the professional end where investments in individual loans might be £10 - 25k. I'm assuming you're using the term 'professional' loosely when referring to some financial personnel/entities? That is in regard to my own personal experience as I cannot speak for others. I'm also with jimbo in the sense that in the current format, investors can pick when, where & how much to invest & with whom. That way you have almost complete control & you learn a little bit along the way. IMHO
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pikestaff
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Post by pikestaff on Mar 23, 2014 14:51:18 GMT
Half the fun of p2p is being able to choose who you lend to on your own terms. Why would I want to buy a bond where that process has been taken out of the equation for me...? For people like us who frequent these forums, yes (up to a point). But it's a minority taste. P2p will never get big unless it also caters for the mass market who just want a simple product they can invest in. That's where RS is so clever, but there will be a place for retail bonds/funds too, once the regulatory details are sorted.
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