Post by bengilbert on Mar 30, 2014 18:50:10 GMT
I think the videos from the Assetz lender day are worth looking at in order to get a sense of the people involved in the business, but in case some people don't want to sit through the full 3 hours worth, here is what I found most interesting/important from watching:
>Defaults vs losses. Andrew Holgate presented it this way - a default is when a borrower breaks some terms of the loan. This isn't always a bad thing. Some things can be included in the terms of the loan which give a forewarning of problems that might be on their way - once they've happened, you can get in early to try to manage the process of protecting lenders' money. So, a default can be the start of a process of securing lenders' money, rather than an admission that the money has been lost.
>Default process. (All this was new to me) If there's a default, Andrew said that they would tell lenders immediately. They would then put together a default management team, which would include someone from Assetz, an external lawyer experienced in insolvency/business turn-around, and an accountant. The team would work out possible scenarios for going forward. They would then put these scenarios to lenders to vote on, with 1 pound in the loan = 1 vote.
>Insurance. Andrew said they get copies of relevant insurance documents sent to them every year. If they don't receive them, they have grounds to default the borrower.
>Assetz Capital as a business. Andrew said they've been profitable for quite a while (I think he said 6 months), although there were large set-up costs so the first year accounts will show a loss. David Penston said that they spent 2 and a half years getting the business set up, and they decided to target the areas where banks don't want to get involved at the moment, which is SME and property, since banks made so many mistakes there earlier. (An aside - I've got a Thincats loanpart for 'Assetz for Investors', one of the other Assetz companies, which was auctioned in March 2012, which I suppose is evidence they were already looking at p2p back then).
>Assetz group. The Assetz group is a series of stand-alone companies. The common factor is that Stuart Law is involved in / a majority shareholder in all of them. Assetz for Investors was the first in the group, and they are an online broker of investment property with a database of 60,000 - 65,000 investors.
>Development loans. David Penston said that lenders' money is only given out bit by bit to the borrower, against invoices. A monitoring surveyor goes out every month to check progress. (I was in the Nottingham student development loan from April 2013 and they sent the surveyor's report every month plus photos from the site)
One question I was left with:
>How do Assetz monitor companies to check they haven't breached any of the terms? Who actually does the checking - someone within Assetz, the broker, a third party? The early-warning value of the loan terms is only of value if you learn in time that they've been broken. I don't know if Assetz have formalised any sort of programme for ongoing monitoring - I can imagine that it would be a lot of work.
>Defaults vs losses. Andrew Holgate presented it this way - a default is when a borrower breaks some terms of the loan. This isn't always a bad thing. Some things can be included in the terms of the loan which give a forewarning of problems that might be on their way - once they've happened, you can get in early to try to manage the process of protecting lenders' money. So, a default can be the start of a process of securing lenders' money, rather than an admission that the money has been lost.
>Default process. (All this was new to me) If there's a default, Andrew said that they would tell lenders immediately. They would then put together a default management team, which would include someone from Assetz, an external lawyer experienced in insolvency/business turn-around, and an accountant. The team would work out possible scenarios for going forward. They would then put these scenarios to lenders to vote on, with 1 pound in the loan = 1 vote.
>Insurance. Andrew said they get copies of relevant insurance documents sent to them every year. If they don't receive them, they have grounds to default the borrower.
>Assetz Capital as a business. Andrew said they've been profitable for quite a while (I think he said 6 months), although there were large set-up costs so the first year accounts will show a loss. David Penston said that they spent 2 and a half years getting the business set up, and they decided to target the areas where banks don't want to get involved at the moment, which is SME and property, since banks made so many mistakes there earlier. (An aside - I've got a Thincats loanpart for 'Assetz for Investors', one of the other Assetz companies, which was auctioned in March 2012, which I suppose is evidence they were already looking at p2p back then).
>Assetz group. The Assetz group is a series of stand-alone companies. The common factor is that Stuart Law is involved in / a majority shareholder in all of them. Assetz for Investors was the first in the group, and they are an online broker of investment property with a database of 60,000 - 65,000 investors.
>Development loans. David Penston said that lenders' money is only given out bit by bit to the borrower, against invoices. A monitoring surveyor goes out every month to check progress. (I was in the Nottingham student development loan from April 2013 and they sent the surveyor's report every month plus photos from the site)
One question I was left with:
>How do Assetz monitor companies to check they haven't breached any of the terms? Who actually does the checking - someone within Assetz, the broker, a third party? The early-warning value of the loan terms is only of value if you learn in time that they've been broken. I don't know if Assetz have formalised any sort of programme for ongoing monitoring - I can imagine that it would be a lot of work.
