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Post by davee39 on Oct 21, 2016 7:58:59 GMT
No longer worthwhile for me.
At some point the music will stop on the property 'pass the parcel' game and lenders will be stuck.
VPC venture capital (Investment Trust) have reported greater than expected losses on whole loans and are pulling out
FC is very heavily lossmaking which enhances platform risk
Problems with unsecured loans are also affecting other providers, I do not believe it is possible to pick winners and beat the odds on a regular basis.
My choice has been Zopa+, I have a low maintenance portfolio yielding around 12%, Predicted to be 7% after defaults
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Post by jackpease on Oct 21, 2016 8:20:35 GMT
I think the question 'does anyone else make money on SME loans without provision funds' is a really good one and is precisely why i have stuck with FC for so long. Crashed out of FK and Rebs - will wind down FC SME loans - really hard to find alternatives if one feels one has maxed out on property
Jack P
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kt
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Post by kt on Oct 21, 2016 8:59:03 GMT
VPC venture capital (Investment Trust) have reported greater than expected losses on whole loans and are pulling out Were they exposed to property loans or only the SME side of things? KT
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blender
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Post by blender on Oct 21, 2016 10:18:58 GMT
VPC venture capital (Investment Trust) have reported greater than expected losses on whole loans and are pulling out Were they exposed to property loans or only the SME side of things? KT My guess is that it would be SME. Certainly the losses will all be SME. Property loans were excluded from whole loans for a long while, and then they went mostly to the trust (if not all). Interesting that if they had taken property loans, the loss performance would be better. They would have had cash back, and perhaps they would still be in.
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Post by davee39 on Oct 21, 2016 13:32:07 GMT
My information on VPC comes from a recent report and looks to be in the context of UK SME. In the last hour I have invested in this fund, currently at a 20% discount and a predicted yield of 6 to 8%. I am expecting a modest capital gain if the discount narrows. I am also in P2P Global for a 7% yield and a 16% discount. I mark FC's own trust as AVOID!
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Post by Icarus Unleashed on Oct 22, 2016 10:13:02 GMT
No longer worthwhile for me. At some point the music will stop on the property 'pass the parcel' game and lenders will be stuck. VPC venture capital (Investment Trust) have reported greater than expected losses on whole loans and are pulling out FC is very heavily lossmaking which enhances platform risk Problems with unsecured loans are also affecting other providers, I do not believe it is possible to pick winners and beat the odds on a regular basis. Interesting. I've not added new money to FC for a long time but I have a legacy investment where I tend to re-invest the proceeds if I see something I like. I stopped lending on the SME side of FC a long time ago after suffering a very small number of defaults (almost all of my P2P investments afterwards were secured). The current loss-making nature of FC does make one wonder whether it is the UK's answer to Prosper (from a business model perspective only - i.e. needs to keep originating more and more volume to try and stay ahead of costs). You'd have thought that their 1% fee on amounts lent plus their secondary market fees and borrower fees would be substantial by now but I guess that costs associated with building the brand, expansion into new jurisdictions and managing all of the loans that they originate are also substantial. The UK property party will probably come to an end one day (but I think many have been saying that for the past 8 years). In any event, when the music does stop it's going to leave one hell of a hangover! UK economy seems to be pretty heavily dependent on the housing sector...
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rxdav
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Post by rxdav on Oct 22, 2016 10:46:05 GMT
I have been with FC for some three years but now only hold property loans - which I churn before they reach the one month to maturity point (after which you become hostage to the property team - not somewhere you want to be). I'm making an annualised 8.4% real return and have had zero defaults using my current strategy (being retired I have the time).
It does have good liquidity and I can unload most of my loans parts at a small premium to cover selling costs and those sold at par will invariably sell via autotrader (but I am aware some unfortunate individual is consequently picking up my debris - caveat emptor).
However, of the four P2P platforms I use this is now my smallest holding and I really only remain to diversify my risk - it is not a happy place to be.
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blender
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Post by blender on Oct 22, 2016 13:21:24 GMT
... As for FC itself, they still have lower platform risk than most other platforms given their equity funding base. The problem is how long that continues given their rather staggering rate of losses. FC's focus on taking upfront fees and passing on the full NIM to the investor (which makes them an attractive reg arb to some institutions ) is rather similar to LendingClub. This is great for scaling origination volumes and thus was good for their valuation into any possible IPO. However, I think people are wising up to the fact that many large P2P platforms aren't showing much ability to make money with a "1% fee" type model. It seems the platforms actually making the money are bridge lenders like LI or SS. Living within the 1% is the key test of FC's future value. I guess there will be a very careful divvying of the part of it allowed for overheads to demonstrate the FC has a viable future. How much of that do we think they can afford to spend on customer services and communications?
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Post by GSV3MIaC on Oct 22, 2016 16:25:18 GMT
The 1% is, of course, not the total the FC manage to take from the borrowers .. there are also arrangement fees etc. Not to mention the 0.25% on the SM (peanuts .. but still, some folks can survive quite a while on peanuts).
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blender
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Post by blender on Oct 22, 2016 16:56:13 GMT
The 1% is, of course, not the total the FC manage to take from the borrowers .. there are also arrangement fees etc. Not to mention the 0.25% on the SM (peanuts .. but still, some folks can survive quite a while on peanuts). Quite right. If a third of the loans have to be replaced each year (to stand still) then borrower fees will be similar to the servicing fee. But I tend to think that borrower fee is for loan acquisition and the 1% is for management of the loan book. The various promotions and commissions come from the borrower fee. The return on capital comes from what's left over from both - which looks tough. FC need to keep staff numbers down as they grow, which will make it difficult to deal with those pesky lenders. Autobidders who never look at the detail is what they want.
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Post by silvermachine on Oct 25, 2016 17:23:26 GMT
Hi everyone, I've only been with FC a short time investing just 1k
I had a very early default with a recovery of just 3% of my investment
Have since made the decision to move my money elsewhere
......apart from £200 still invested. Despite this being an A category it is currently late on its last payment! 
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sl125
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Post by sl125 on Oct 25, 2016 17:48:15 GMT
£200 on one loan against a total investment of £1000 sounds like you didn't heed the number one rule when it comes to P2P: diversification.
Without diversification, the risk that an individual loan will wipe out your capital is increased significantly.
When you say a short time.... how long? As it is very very unlikely that a loan goes into default within 6 months.
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dorset
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Post by dorset on Oct 25, 2016 19:17:28 GMT
I've been with FC almost from the beginning. At my peak I had over £50k invested across 1000++ loans. Have kept detailed stats from day one and over 5 years+ returns have been pretty constant at 7 to 8%. I have had 110 defaults and have a current recovery rate of 26.04% which will of course rise possibly to about 50% would be my guess.
I pulled out of property some months ago and so all my loans are standard P2B which now total about £20k. This sum is gradually drifting downwards as the recycling opportunities are not great. FC have certainly fixed the risk bands to manipulate the borrower rate. For example looking back on my older loans what is now A would have been certainly a B or possibly a C two years ago.
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blender
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Post by blender on Oct 25, 2016 21:33:23 GMT
£200 on one loan against a total investment of £1000 sounds like you didn't heed the number one rule when it comes to P2P: diversification. Without diversification, the risk that an individual loan will wipe out your capital is increased significantly. When you say a short time.... how long? As it is very very unlikely that a loan goes into default within 6 months. I reckon that the A loan late on the last payment must be a property loan and so the size of it is not such a risk. But diversity should be much higher on the SME loans, and we are not told the size of the one that defaulted. In a short time you do not expect to get much recovery - that takes years.
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adrianc
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Post by adrianc on Nov 10, 2016 16:10:27 GMT
Another step nearer leaving... The last of my sellable parts has gone. I'm down to less than 10% of my peak balance, across just three overdue property loans - one due to be re-listed and repaid the week before last, one that's allegedly in the final stages of legals, and one that's just started the drip-drip of repaying. Then it's the slow recovery of defaults, and Farewell Celebrations.
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