adrianc
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Post by adrianc on Jul 31, 2016 8:43:44 GMT
At that sort of level you could get discretionary management from a Investment Bank, thereby access to hedge funds (who probably are involved in the finance of some of the platforms) where they aim for minimum returns of 25% minimum, with probably less risk than P2P lending. So, in short, no. Don't be so sure. Hedge funds don't always make money and do sometimes lose money. That's true - but I'm sure they all AIM for minimum 25%, low-risk. They just don't always get their aim...
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bg
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Post by bg on Jul 31, 2016 8:53:10 GMT
Don't be so sure. Hedge funds don't always make money and do sometimes lose money. That's true - but I'm sure they all AIM for minimum 25%, low-risk. They just don't always get their aim... There's no such thing as 25%+ low risk returns. A 10% return would be regarded as a good year for most hedge funds (this is written by someone who worked in the industry for many years). look at it another way - why would a fund invest in P2P targeting 8-10% returns before bad debts if their aim is to make 25%
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adrianc
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Post by adrianc on Jul 31, 2016 9:28:12 GMT
That's true - but I'm sure they all AIM for minimum 25%, low-risk. They just don't always get their aim... There's no such thing as 25%+ low risk returns. Of course there isn't. But it doesn't stop us aiming for it, does it? Do aims have to be realistic?
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Post by brokenbiscuits on Jul 31, 2016 9:41:00 GMT
Fear and perhaps more importantly common sense stop us piling in to the higher rate return investments. There must be a catch, right?
I've got a fair chunk in an India fund. They have 25% of the world's under 25 year olds,when they all grow and start consuming there should be strong profits there.
I think this will be my best investment over my life time but still dont have the balls (or stupidity?) Do go all in.
Fair play to the risk takers who are happy to go all in and risk finishing with nothing for a chance of a big win. Bit like the ones who talk about having near all their money in savingstream.
Slow and steady wins the race most of the time.
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bg
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Post by bg on Jul 31, 2016 11:16:14 GMT
There's no such thing as 25%+ low risk returns. Of course there isn't. But it doesn't stop us aiming for it, does it? Do aims have to be realistic? In that world yes they do. They all have target returns and there can be trouble if they don't hit them.
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ped
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Post by ped on Jul 31, 2016 15:50:43 GMT
Light hearted question: You have won a decent amount on the lottery/Euro millions, or maybe inherited from your long lost second cousin from the depths of Australia. By decent, I am talking maybe five million pounds plus. Would you invest on here still? Would you invest a great deal extra? Would you, just for the fun of it, like to sneak in and in one big whoosh, clear the SM (not again and again, but just once for the fun of it)? So Geraldine after your post someone buys 120k of 93 on the SM....hmmm something to tell us about, second cousin maybe? 
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Post by geraldine1210 on Jul 31, 2016 16:14:41 GMT
Light hearted question: You have won a decent amount on the lottery/Euro millions, or maybe inherited from your long lost second cousin from the depths of Australia. By decent, I am talking maybe five million pounds plus. Would you invest on here still? Would you invest a great deal extra? Would you, just for the fun of it, like to sneak in and in one big whoosh, clear the SM (not again and again, but just once for the fun of it)? So Geraldine after your post someone buys 120k of 93 on the SM....hmmm something to tell us about, second cousin maybe? Do we think ghat was an actual investor, rather than ss tidying the sm.
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locutus
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Post by locutus on Jul 31, 2016 16:50:40 GMT
Though it's a bit of a digression I can provide some colour on that. I'm a portfolio manager and founding partner of a mid-sized HF (nothing to do with P2P/SMEs but in investing in macro/fixed income). Our clients are mainly charitable and university endowments, US DB state pension funds and smaller SWFs. None of our clients want anything like 25%. They target returns in the territory of 7-10%, net of fees, or in the case of the endowments something like CPI+5%. They want a good Sharpe ratio (ratio of return to volatility), ideally around 1.5-2. The key factor for them, however, is that we deliver returns with zero or low correlation with major asset classes (stocks, bonds, property) and the global economy i.e pure alpha and no beta. In our specific case, we offer them a long volatility/short carry profile which is a good diversifier for the majority of their assets which tend to be long carry and pro-cyclical. We could easily leverage our portfolio to a greater degree to generate higher returns (we're 90% in cash on average since we operate on margin and use derivatives) but alpha is rather finite, it simply can't be scaled. We'd end up buying the market, resulting in a positive correlation and undermining the key investment rationale for our clients. I understood some of those words. 
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