The Final Straw

Jun 23, 2016 17:05:42 GMT stuartassetzcapital said:

Jun 19, 2016 19:23:27 GMT jjc said:

On the AC-SS comparison are we perhaps missing one point – origination efficacy. Despite having a much larger team of RM’s, a much longer history in the property sector (Assetz Group), & a significantly lower cost of capital (several million equity raise, £23m QAA, insto backers) SS somehow manage to bring on a substantial pipeline well beyond AC’s volumes (& at higher yields).

Just last week SS managed to bring on 9 deals in London (where AC have an office & their main property team), & 3 more now to a borrower based in Manchester – for a cool >£15m ie not much less than AC have managed to draw down across all their retail loans so far this year - seemingly from right under AC’s noses. A look at the latter Mancs borrower’s debenture launched last year on ISDX mentions Assetz were an exit partner for them – so they’ve known them for some time (perhaps quite well) yet AC still couldn’t get the deals.

Why? Is it speed, agility, ease of doing business or something else (can’t be the rate offered to the borrower unless there’s something very unusual happening behind the scenes)?

Or perhaps we knew something. We know a lot of people in property but doesn't mean we would lend to them.
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Sorry stuartassetzcapital but AC don't have the monopoly on knowledge or experience in property or anything else for that matter; As mrclondon eloquently put it earlier in this thread "I think SS have been incredibly smart in targeting large loans. Some SS loans undoubtedly wouldn't pass AC's tighter credit control due diligence, but any attempt to imply a majority of SS loans are substantially poorer quality than AC loans simply doesn't fly to anyone that undertakes their own detailed due diligence on loans. Simply ramping up the loan numbers at AC whilst targeting small loans doesn't help the many lenders that want 4, 5 or 6 figure slices of loans. Its simply not worth spending multiple hours and in many cases actual money doing detailed loan due diligence for less than 4 figure sums. Like others I'm utterly mystified at AC giving me eighty something quid in the #166 replacement loan, and telling me (in effect) to withdraw the remainder from the platform, which I have of course done (to lend at SS)."

The whole ethos of P2P is funding & DD is done by the crowd, for the benefit of all, everyone has something to offer from the accountants & finance people to the chap who lives up the road from a pub borrower & pops in for a drink to report on the atmosphere & service. Many MLIA investors are experienced in most aspects of business, finance & P2P lending & collectively would probably have a better success rate of picking "safe loans" than AC have demonstrated - it is obvious that to be successful & profitable in the future AC need to drive down it's funding costs hence the BS depositors at c.4% & keep borrower rates as keen as possible to drive volume, subject to internal quality controls & as future shareholders we are pleased that you have our & your best interest in the forefront of your strategy & confident it will succeed. 

It realistically means however that double digit returns & the MLIA are dead (except for holding legacy runoff loans) with the Green account going the same way (for slightly different reasons) & it insults our intelligence as lenders to claim anything different. Competitor platforms have just chosen different strategies which are currently offering lenders a fairer share of the available cake, both you & the challenger banks probably have higher cost bases & overheads to cover but be assured a lot of the loans that SS/MT/Abl etc offer are no more risky than those you are sourcing.