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Post by lendinglawyer on Jun 15, 2017 10:53:35 GMT
There has been a lot of discussion about the FCA taking a dim view of platforms investing their own capital or restricting the extent to which they do so, but I do not believe this to be the case. My understanding is that there are no direct restriction on platforms investing their own capital. However, regulated firms must ensure they meet capital adequacy requirements. Investments into P2P will have a very high risk rating which means they will need to almost fully fund these investments from reserves to ensure that they can absorb losses making it very costly for them in capital terms. It is the increase in capital adequacy requirements that has led to most banks shying away from higher risk lending and why they are happy to lend into residential mortgages at very low rates (the capital they need to keep aside is much lower) versus higher risk development loans etc which although provide much higher returns (and arguably a lot high risk adjusted return), require much more capital and thus greatly reduce their ability to leverage. These are all very good points, for banks. However, I will be very surprised if Lendy etc. are regulated to the extent they are covered by the type of rules you are talking about, being the various ratios (e.g. CET1 where risk weighted assets to which you refer are relevant) required by CRD IV and the like. Banks are subject to the regulations they are subject to because (to massively simplify) they take deposits from customers and lend them on to other customers for their own profit. Lendy's model is more like a credit intermediary, as it accepts no deposits and simply "introduces" customers to other customers. As it is not a deposit taker it is not subject to bank regulation under the UK rules. In other countries (e.g. France) the regulatory definition of bank covers pure lending, and so perhaps they would be regulated in that way. No doubt they are subject to some form of capital adequacy, but it won't be to a bank standard. I should say I'm not a complete expert on these matters, but I've picked up some knowledge from my time acting on acquisitions of financial institutions (including a couple of banks) over the years.
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nick
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Post by nick on Jun 15, 2017 11:41:28 GMT
There has been a lot of discussion about the FCA taking a dim view of platforms investing their own capital or restricting the extent to which they do so, but I do not believe this to be the case. My understanding is that there are no direct restriction on platforms investing their own capital. However, regulated firms must ensure they meet capital adequacy requirements. Investments into P2P will have a very high risk rating which means they will need to almost fully fund these investments from reserves to ensure that they can absorb losses making it very costly for them in capital terms. It is the increase in capital adequacy requirements that has led to most banks shying away from higher risk lending and why they are happy to lend into residential mortgages at very low rates (the capital they need to keep aside is much lower) versus higher risk development loans etc which although provide much higher returns (and arguably a lot high risk adjusted return), require much more capital and thus greatly reduce their ability to leverage. These are all very good points, for banks. However, I will be very surprised if Lendy etc. are regulated to the extent they are covered by the type of rules you are talking about, being the various ratios (e.g. CET1 where risk weighted assets to which you refer are relevant) required by CRD IV and the like. Banks are subject to the regulations they are subject to because (to massively simplify) they take deposits from customers and lend them on to other customers for their own profit. Lendy's model is more like a credit intermediary, as it accepts no deposits and simply "introduces" customers to other customers. As it is not a deposit taker it is not subject to bank regulation under the UK rules. In other countries (e.g. France) the regulatory definition of bank covers pure lending, and so perhaps they would be regulated in that way. No doubt they are subject to some form of capital adequacy, but it won't be to a bank standard. I should say I'm not a complete expert on these matters, but I've picked up some knowledge from my time acting on acquisitions of financial institutions (including a couple of banks) over the years. I agree, the prudential requirements of banks is significantly more onerous, but the basic prudential capital adequacy requirement applicable to nearly all regulated firms is still surprising high, particularly in respect of proving for credit and market risks. I have limited recent experience, but was unfortunate enough to master capital resource requirements when setting up a regulated investment advisory business 10 years ago and level of regulatory capital that we needed to hold was unexpectedly high given that we were only an advisory business with no client assets or money.
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GeorgeT
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Post by GeorgeT on Jun 15, 2017 16:47:07 GMT
I have sold a number of loan parts over the past few days. I thought I woud share with you what the sale times were - from date of listing for sale to date of sale.
Please note sales queues have increased in the past week so your mileage may vary and I would expect sale times to be increasing.
DFL008 (L'Pool) - Listed 31 May - Sold 15 June - 16 days to sell
DFL006 (C'diff) - Listed 27 May - Sold 15 June - 20 days to sell
PBL166 (Scot) - Listed 3 June - Sold 15 June - 12 days to sell
PBL120 (S**) - Listed 25 May - Sold 15 June - 22 days to sell
PBL150 (Christ') - Listed 5 June - Sold 14 June - 9 days to sell
PBL168 (C*****) - Listed 8 June - Sold 14 June - 6 days to sell
PBL158 (R******) - Listed 8 June - Sold 12 June - 4 days to sell
PBL167 (Pick') - Listed 7 June - Sold 12 June - 5 days to sell
DFL009 (Abbey) - Listed 5 June - Sold 10 June - 5 days to sell
PBL151 (Christ') - Listed 4 June - Sold 8 June - 4 days to sell
I hope this demonstrates there is no need to panic and liqudity remains pretty good for decent 12%ers.
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Post by lendinglawyer on Jun 15, 2017 21:17:24 GMT
I have sold a number of loan parts over the past few days. I thought I woud share with you what the sale times were - from date of listing for sale to date of sale. Please note sales queues have increased in the past week so your mileage may vary and I would expect sale times to be increasing. DFL008 (L'Pool) - Listed 31 May - Sold 15 June - 16 days to sell DFL006 (C'diff) - Listed 27 May - Sold 15 June - 20 days to sell PBL166 (Scot) - Listed 3 June - Sold 15 June - 12 days to sell PBL120 (S**) - Listed 25 May - Sold 15 June - 22 days to sell PBL150 (Christ') - Listed 5 June - Sold 14 June - 9 days to sell PBL168 (C*****) - Listed 8 June - Sold 14 June - 6 days to sell PBL158 (R******) - Listed 8 June - Sold 12 June - 4 days to sell PBL167 (Pick') - Listed 7 June - Sold 12 June - 5 days to sell DFL009 (Abbey) - Listed 5 June - Sold 10 June - 5 days to sell PBL151 (Christ') - Listed 4 June - Sold 8 June - 4 days to sell I hope this demonstrates there is no need to panic and liqudity remains pretty good for decent 12%ers. Agreed. But how you getting on with PBL 152? I'm (perhaps rashly) assuming you listed it around the same time as 150 and 151...
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GeorgeT
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Post by GeorgeT on Jun 15, 2017 21:37:31 GMT
I avoided 152 all together. Never invested in it because it was the biggest of the trio.
If I remember rightly all 3 loans were to the same borrower and went live at the same time and all were very dodgy looking propositions. Therefore I decided to invest in the two smaller ones with the view that they would be easier to sell out of well before the risk hit the fan and I would be able to get 12% for a few months on the smaller ones without carrying much risk.
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Post by df on Jun 15, 2017 23:17:17 GMT
I have about 10% up for sale (less guilty than you are). I'm now considering different strategy. Stop selling, stop looking at pipeline, close my eyes, shut my ears and hope that one day some of them will be repaid  I might be wrong, but I see this as the way forward. There is no more easy exit strategy on Saving Stream. There are lots of hopes (e.g. next repayment, next interest run etc.), but in reality the queues get longer and longer. I have nothing up for sale. I decided to reduce my holdings in early April and sold about 60%. Most of it had zero length queues when I sold but a couple took a few days. I'll sit it out the same as you. I have money in another platform where there is no secondary market escape route but I'm not losing sleep over that. They are very transparent and well managed. I was one of the five complainants in the Ombudsman inquiry into Equitable Life so I'm philosophical about waiting years for my money and then not seeing much of it anyway. There's more to life. I was also trying to reduce in early April. Most of my parts had longer queues, but not near as long as they are today. I have a little bit in two platforms without SM and I'm very happy with such arrangement. GS are doing 30-days loans, not very long wait if I suddenly need cash. Unbolted works very well for me - it is a small part of my portfolio, so I don't expect any urge to withdraw. What I like about Unbolted is that it doesn't give me any stress (if any of them defaulted, selling 'shiny object' is much easier and quicker than castle or field) and the effort-to-return ratio is great The only work I have to do is to drip-feed.
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elliotn
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Post by elliotn on Jun 16, 2017 0:57:50 GMT
I avoided 152 all together. Never invested in it because it was the biggest of the trio. If I remember rightly all 3 loans were to the same borrower and went live at the same time and all were very dodgy looking propositions. Therefore I decided to invest in the two smaller ones with the view that they would be easier to sell out of well before the risk hit the fan and I would be able to get 12% for a few months on the smaller ones without carrying much risk. Certainly borne out by the SM although cross-collateralisation pulled 152 into the risk equation. Although there were o/s pp issues (for year round residency) the borrower stomped up a stonking 50% purchase value which significantly de-risked recovery so "very dodgy looking propositions" potentially tad harsh.
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GeorgeT
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Post by GeorgeT on Jun 19, 2017 15:21:33 GMT
PBL167 very popular on the SM today. One investor took £10k, another took £5k. This one is 12% with 208 days to run.
PBL168 also selling well. One investor took £20k. This one is 12% with 286 days to run.
PBL150 is another hot seller. One investor took a £10k bite. This is 12% with 226 days left.
PBL151 also hot. One investor took a £15k chunk. Also 12% and 226 days to run.
DFL019 - One investor has bought £19k of this. 12% and 274 days to go.
In summary, the amount on the SM is showing signs of a fall.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jun 19, 2017 18:07:15 GMT
DFL008 (L'Pool) - Listed 31 May - Sold 15 June - 16 days to sell DFL006 (C'diff) - Listed 27 May - Sold 15 June - 20 days to sell . JAAMOI what interest did you receive on these two, listed in one month and sold in the next?
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GeorgeT
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Post by GeorgeT on Jun 19, 2017 19:50:50 GMT
PBL167 very popular on the SM today. One investor took £10k, another took £5k. This one is 12% with 208 days to run. PBL168 also selling well. One investor took £20k. This one is 12% with 286 days to run. PBL150 is another hot seller. One investor took a £10k bite. This is 12% with 226 days left. PBL151 also hot. One investor took a £15k chunk. Also 12% and 226 days to run. DFL019 - One investor has bought £19k of this. 12% and 274 days to go. In summary, the amount on the SM is showing signs of a fall. Same entity (d**********d) as above also bought £15k in PBL158 and £10k in PBL157 - so clearly not discerning  Unfortunately, one swallow does not a summer make. This one entity has spent at least £100k today but still need a goodly number more like them to make a dent in an SM nudging £8M. (£8.4M inc DEFs) Very true but I try to be optimistic. Swallows migrate in big flocks so I'm hoping this lone swallow is the front flyer of a big flock, all heading towards the LY SM for the summer. Early indications are that I could be right and more buyers are landing ... PBL120 - 12% but only 38 days to run - An investor has bought nearly £12k of it this evening. DFL008 - 12% but only 39 days to run. A £10k chunk bought this evening. Definite signs of an upsurge in investor activity on the SM.
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david42
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Post by david42 on Jun 19, 2017 22:25:24 GMT
Jonah's charts also show a levelling off over the last 5 days - seen most clearly on the 2 month chart. Unless Lendy does something that upsets the market, I think we may have seen the peak.
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Post by df on Jun 20, 2017 0:23:26 GMT
Jonah's charts also show a levelling off over the last 5 days - seen most clearly on the 2 month chart. Unless Lendy does something that upsets the market, I think we may have seen the peak. We may not if Ly doesn't make progress at the repayment end. 19 defaults hold a lot of cash from potential reinvestment and make Ly unattractive to new investors as well as encouraging existing investors to reduce or sell off.
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skippyonspeed
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Post by skippyonspeed on Jun 22, 2017 9:51:17 GMT
It might be a good idea to rename this thread "What's NOT on the SM? (L)". This would make lists of loans a lot shorter and easier to follow!!!  |
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Post by investor1925 on Jun 22, 2017 11:14:44 GMT
When we first started investing on SS, only a year ago, there wasn't hardly anything on the secondary market, and you had to be pretty quick with the keyboard to get much at all.
There is at least £54 million for sale on there now, and that doesn't include the defaults.
Either a lot of people are trying to sell out, or a lot more have come into the market over the last 12 months, don't know which, but probably a combination of both.
In any event £54 million at 12% equates to £540k per month in lost interest by investors. OUCH !!!
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Post by GSV3MIaC on Jun 22, 2017 11:27:53 GMT
Check your math - I make the total on the SM about £8m, and that includes defaults etc.
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I might be wrong, but I see this as the way forward. There is no more easy exit strategy on Saving Stream. There are lots of hopes (e.g. next repayment, next interest run etc.), but in reality the queues get longer and longer. 
