Love ebbing away (loan allocation concerns)

I'm really not sure the wee hours of Monday morning are going to be such a huge bonanza for SM buyers. 

The amount returned to SS investors' accounts when PBL059 repaid on Wednesday was £3080k plus about £11k of interest accrued so far this month.  I haven't a clue how much of that stayed within SS waiting for the new loans, but I doubt much was deployed elsewhere and couldn't be brought back to SS if needed to settle negative balances.  The total funding required for PBL095 and PBL09 was £2995k.  Between that and the fact that today's allocation factors were pretty low, I'm not sure there will be that much selling required to cover overbuying of the new loans, especially if some people are trying to increase their overall SS portfolio.

There's been a fair amount of SM activity today as people rebalance their portfolios, and there probably will be more of that throughout the weekend, but the only people who'll wait until Monday to sell are those trying to earn a few extra pence of interest.

mikes1531 I have run nearly my whole portfolio on the SM for 2 an a half years... You say you are not really sure... Well I say I am positively sure... The SS .. SM works perfect.. If YOU are prepared to work it.. If you expect to log in and get what you want you will be disappointed.. If you log in and are prepared to spend 2/3 or 4 hours on a day... It's there ... 12% doesn't come easy... You need to work for it.. And I do.. Everyday. And I get it...
SS at the moment is oversubscribed.. Everyone who uses SS should realise that by now.. The newbies will be disappointed but only at the outset of there ambitions, they like me will soon realise that actually 12% is not that easy with SS .... But it is achievable with almost any reasonable amount if they are willing to put in a bit of effort.

Couldn't have put it any better.. 

No love  ebbing anywhere from here.

My primary concern with all this is not necessarily the pre-fund game though it is starting to get annoying and it cannot be sustained in the long term. 

My issue is more with the fact that it seems that it is becoming increasingly difficult to increase diversification while maintaining the same exposure on a per loan basis.

For example, if you have 100 pounds in 50 different loans and 5k total invested, it will soon be impossible to increase your investment to 10k while maintaining your per loan exposure to 100 pounds (i.e. increase diversification from 50 to 100 loans). Going forward, increasing your investment will need to result in an increase in the amount you invest per loan. The pace of origination is not keeping up with repayments + compounding interest. 

Over time, this will further increase the money pool chasing each loan resulting in even lower percentage allocations. Not to mention the increasing number of investors. 

Am I correct in my reasoning?

Basically, the pace of origination needs to increase in a way that maintains the current level of quality. I don't know if this is feasible. As in, Saving Stream capacity can be improved vs very limited amount of opportunities in the market (given the nature of the assets and the number of players and platforms competing for origination. 

Regardless of what saving stream does with the pre-fund game, unless the pool of money chasing each loan goes down (i.e. lower ROI, yikes!) or the pace of origination speeds up, we could eventually reach a "each investor gets to invest 1 pound scenario". 

I also lend on both SS and MT. But although I started earlier on SS (I ignored MT until BPF came along) I've now got 20% more capital lent at MT than at SS.

There is other places to invest as well whatever they do nobody will be happy.

well I joined SS a week ago, and yes takes a little work...but have got over £10k in this week without issue