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Post by stuartassetzcapital on Aug 4, 2017 12:58:27 GMT
Something like 40% of total funds in the QAA are held as cash, providing the liquidity reserve that ensures you can withdraw instantly. The rest is invested in AC loans, some of which will have hit problems since the QAA acquired them (or been suspended for admin reasons as ilmoro points out). Just because you move a little money into or out of the QAA, it doesn't buy or sell additional loan holdings. Those investment decisions are made at an aggregate level by AC's behind-the-scenes QAA lever-pullers. The interesting question, of course, is what happens if everyone wants their QAA money back at once.... Thanks SteveT. I understand now. I was not aware that around-40% of QAA funds was held in cash. I'm assuming then that the 30-Day AA would not have such big % cash liquidity, if any at all. Thanks again. Actually all the Access Accounts share the same cash buffer so are equally liquid.
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Post by swfab on Aug 4, 2017 20:02:52 GMT
Hi I'm sorry that is not true. The QAA is as perfectly diversified as possible. The drill down report shows this. It is impossible for the bulk of your QAA investment to be in a single suspended loan - I encourage you to contact customer services on the phone immediately and provide your account details as I know the technical implementation and know this is not possible. Hi stuartassetzcapital . When I read bikeman reply, I assumed he was describing an investment account other than QAA or 30DAA.
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Post by swfab on Aug 4, 2017 20:13:36 GMT
Thanks SteveT . I understand now. I was not aware that around-40% of QAA funds was held in cash. I'm assuming then that the 30-Day AA would not have such big % cash liquidity, if any at all. Thanks again. Actually all the Access Accounts share the same cash buffer so are equally liquid. Ah alright. Thanks stuartassetzcapital
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Post by chris on Aug 7, 2017 14:30:27 GMT
Thanks ilmoro . Just answered SteveT as well. So here you go, some loans 'may not' be in trouble but many of the ones I listed are and why would any money be pumped into loan 86? You need to think of it like a fund which invests in loans and then you buy a units of the fund, each one which gives you a proprtion of all the loans it holds. The QAA invested in #86 before it got into trouble and was suspended, as its suspended it cant sell it so each unit of the QAA contains a part of that loan. The good news is that as the QAA increases in size the holding of the loan gets diluted as each loan is spread across more units (though vice versa if it shrinks) so lets hope AC continues to thrive. The only loans the QAA doesnt hold are those that were suspended before it existed (possibly some windmills if they are reserved for GEIA) 30DAA is part of QAA incidentally. When you invest funds into the QAA those funds are added to the cash pool and behind the scenes an immediately executed buy instruction is created that buys a small slice off every existing lender's loan units. Withdraw and you sell your holdings back to all the other lenders, using their portions of the cash pool. When the QAA buys or sells on the wider aftermarket those purchases and sales are again distributed proportionately amongst all lenders. Customer services will be able to provide you with a more verbose description but the reason suspended loan units can still be traded amongst QAA / 30DAA investors via those mechanisms is that this is only true for loans where the provision fund has taken the discretionary decision to cover the expected losses in those loans and has ring fenced funds to do so. So lenders are not disadvantaged by buying into those loans in any way. If the provision fund were not covering losses in those loans then they wouldn't be inter-traded within the access accounts. 30DAA is part of the QAA in that it shares loan units via those mechanisms to keep both accounts balanced, and thus has the same cash pool, but is otherwise separate and with a different provision fund (that for these loans has also taken the decision to cover lender losses).
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Post by chris on Aug 7, 2017 14:33:32 GMT
Actually all the Access Accounts share the same cash buffer so are equally liquid. Ah alright. Thanks stuartassetzcapital Of course there's one large difference between the QAA and 30DAA in that the account has advance notice of expected withdrawals so can sell off loan holdings in advance in order to maintain the cash buffer at the appropriate level.
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Post by bikeman on Aug 7, 2017 15:41:29 GMT
Hi I'm sorry that is not true. The QAA is as perfectly diversified as possible. The drill down report shows this. It is impossible for the bulk of your QAA investment to be in a single suspended loan - I encourage you to contact customer services on the phone immediately and provide your account details as I know the technical implementation and know this is not possible. In my case it was in the GEIA. I contacted customer services questioning why over 2/3's of my investment was made into 3 loans, one of which had trading suspended and it was explained to me that investments are spread across the available loans. So if there's just one loan then that where all the investment goes. I asked how I can withdrawn funds from a loan in which trading was suspended and was told I can't. Effectively AC has grabbed my investment and wont be giving it back.
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SteveT
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Post by SteveT on Aug 7, 2017 15:53:43 GMT
In my case it was in the GEIA. I contacted customer services questioning why over 2/3's of my investment was made into 3 loans, one of which had trading suspended and it was explained to me that investments are spread across the available loans. So if there's just one loan then that where all the investment goes. I asked how I can withdrawn funds from a loan in which trading was suspended and was told I can't. Effectively AC has grabbed my investment and wont be giving it back. At the time the loans were purchased, no more than 20% of your funds should have gone into any single loan. But if that loan is later suspended from trading and then you withdraw funds from your account, the suspended loan could be more than 20% of what is left. The GBBA / GEIA have never guaranteed liquid access to your funds (unlike the QAA / 30DAA)
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warn
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Post by warn on Aug 8, 2017 7:09:35 GMT
See, this discussion just shows why it was a very reasonable idea to launch GBBA and GEIA as "black-box" accounts. Their basic operation was explained at the outset; all that was missing was a minute-by-minute breakdown of exactly how much of exactly which loans I held in them. Now, in an attempt to quieten the anguished howls about lack of transparency and the like, chris and his merry persons stopped fixing bugs for a day or two, and have provided just that. But to what practical end? The accounts will carry on working as they work, and I still can't operate on the individual loan parts within them. If I sit and mull over the breakdown, and compute percentages and averages and individual ROI figures, it achieves nothing but preventing me from nipping outside and smelling the roses. There's nothing I can do about it other than vainly moan or not let the door hit me. It was fine as it was. Such a waste of time. I'd much rather they'd taken a moment to include an LTV column in MLIA downloads. |
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SteveT
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Post by SteveT on Aug 8, 2017 7:41:17 GMT
I have to disagree with your "waste of time" view. It's always been possible for Excel-jockeys to work out their managed account loan holdings from the transaction report; the new loan holdings report gives the same information to everyone. If this leads some lenders to realise their understanding of how the managed accounts work was wrong, that's probably helpful all round. And for those who use the GBBA as a "buffer" whilst they wait for MLIA holdings to build over time, at least they can now more easily spot loans they are already overexposed to (in terms of risk of loan suspension)
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jlend
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Post by jlend on Aug 8, 2017 8:40:11 GMT
I have to disagree with your "waste of time" view. It's always been possible for Excel-jockeys to work out their managed account loan holdings from the transaction report; the new loan holdings report gives the same information to everyone. If this leads some lenders to realise their understanding of how the managed accounts work was wrong, that's probably helpful all round. And for those who use the GBBA as a "buffer" whilst they wait for MLIA holdings to build over time, at least they can now more easily spot loans they are already overexposed to (in terms of risk of loan suspension) I think it's good as well. I don't have excel or use fancy spreadsheets. I just use my Samsung tablet and phone. Neither do I use the MLIA. It's good to be able to see how much is suspended and in which loans in the GBBA etc.
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savernake
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Post by savernake on Aug 8, 2017 8:58:56 GMT
Surely if the GBBA/GEIA/PSIA accounts are supposed to be 'black box' and all three come with a Provision fund then it shouldn't really matter if a loan is suspended or defaults? Barring a wider economic meltdown or a situation where there is a run on AC and everyone is trying to flee for the exit at the same time, the PF 'should' compensate you. If it doesn't, then what on earth is the point of it being there?
Has there ever been a situation where the PF has refused to pay out on any of the black box accounts?
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jlend
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Post by jlend on Aug 8, 2017 9:24:36 GMT
Surely if the GBBA/GEIA/PSIA accounts are supposed to be 'black box' and all three come with a Provision fund then it shouldn't really matter if a loan is suspended or defaults? Barring a wider economic meltdown or a situation where there is a run on AC and everyone is trying to flee for the exit at the same time, the PF 'should' compensate you. If it doesn't, then what on earth is the point of it being there? Has there ever been a situation where the PF has refused to pay out on any of the black box accounts? Fair question 1. I can't withdraw my money invested in loans in the GBBA that are suspended which i accept. I couldn't see how much money this was in the past. I can now. 2. As far as I am aware the provision fund has never paid out yet. 3. The provision fund is discretionary so may not always pay out in the future. I find it useful to know my worst case exposure based on currently suspended loans.
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Post by bikeman on Aug 8, 2017 18:02:09 GMT
Surely if the GBBA/GEIA/PSIA accounts are supposed to be 'black box' and all three come with a Provision fund then it shouldn't really matter if a loan is suspended or defaults? Barring a wider economic meltdown or a situation where there is a run on AC and everyone is trying to flee for the exit at the same time, the PF 'should' compensate you. If it doesn't, then what on earth is the point of it being there? Has there ever been a situation where the PF has refused to pay out on any of the black box accounts? Fair question 1. I can't withdraw my money invested in loans in the GBBA that are suspended which i accept. I couldn't see how much money this was in the past. I can now. 2. As far as I am aware the provision fund has never paid out yet. 3. The provision fund is discretionary so may not always pay out in the future. I find it useful to know my worst case exposure based on currently suspended loans. Surely it matters in that without full transparency of suspended loans, AC can claim indefinitely that recovery is possible, refuse withdrawals and never payout from the discretionary fund? There is also the possibility that less desirable loans are not invested in by MLIA investors and get picked up by the funds leading to them becoming disproportionately full of bad loans.
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Post by stuartassetzcapital on Aug 9, 2017 8:47:32 GMT
Indeed, it is all about transparency.
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jlend
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Post by jlend on Aug 10, 2017 16:00:18 GMT
Fair question 1. I can't withdraw my money invested in loans in the GBBA that are suspended which i accept. I couldn't see how much money this was in the past. I can now. 2. As far as I am aware the provision fund has never paid out yet. 3. The provision fund is discretionary so may not always pay out in the future. I find it useful to know my worst case exposure based on currently suspended loans. Surely it matters in that without full transparency of suspended loans, AC can claim indefinitely that recovery is possible, refuse withdrawals and never payout from the discretionary fund? There is also the possibility that less desirable loans are not invested in by MLIA investors and get picked up by the funds leading to them becoming disproportionately full of bad loans. Agreed with both your points The AC disrcretionary provision fund certainly pays out later than both the RS and Growthstreet funds for example. I don't think we'll find many lenders that like that but it is what it is based on how AC works which I accept. AC refuses to give any advanced guidance on whether a specific loan will be covered by the provision fund, for example when lenders have asked the question when being asked to vote on a problem loan. It may be many months/years before we see the provision fund pay out on a loan so we can see how much of a loss it will cover. As for your second point. Yep there are certainly some less desirable loans in the GBBA for example based on some lenders experience of trying to withdraw their GBBA money which has taken some time. That is a feature of AC again.
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