happy
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Post by happy on Feb 25, 2018 10:43:25 GMT
Not sure 441 is working well? 10% on both my portfolios today, end of last week was about 8%. Interesting thing is most other loans have reduced dramatically to about 5% (I had a number of loans between 7 & 10%). 441 does have £700k outstanding though which probably makes a difference. Generally happy with new system so far. The account as a whole is still arguably over invested in a few loans. There's a new algorithm coming in 8 - 10 weeks that will adjust how the system distributes funds between loans that will address this, but in general more loans are needed to reduce idle funds and give the system a fair chance of diversifying well across the board. I'm very happy with the part of the algorithm that carries out the adjustments to lender accounts, the finding and executing actual exchanges of loan units. The calculation that sits on top of that to work out the adjustments needed could still do with some fine tuning but is generally working well, and as more loans become available we can tweak that further. Thankfully those adjustments are now easy to make. But surely it cannot be correct that yesterday the new algorithm increased my holding in #544 by about 25%to make it my largest holding? How does this behaviour fit with your expectations of the new algoritm chris ? Personally I would not expect or want this to happen. My current GBBA holding is relatively small so it is not such a great issue but I am waiting until I am comfortable with how the new system behaves before potentially significantly increasing my automated account investment inside the IFISA. Right now I have to say I am not so sure as I would be happy with a 12% allocation in one loan particularly where the system is actively increasing what was already my second largest loan holding both in value and percentage holding to make it my largest. I would appreciate your thoughts on this. Next week is fine, enjoy the rest of your weekend. EDIT: just checked my GBBA archive data and on the 19th Feb, before the new diversification algorithm was released, I had less than 1% in ~#544. So it seems that my 12% holding has been acquired by the system since the change. vaelin, can you check again your holding in #544 and if you know how that has changed since the new algo kicked in, thanks.
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happy
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Post by happy on Feb 25, 2018 8:23:53 GMT
What percentage does #441 make up for everyone else? It has dropped to 10% in my account and has now stopped moving. That still seems quite high for me. I am not really comfortable holding 10% in a single loan. It must be higher than 0.5% above the average? I also have a number of loans at around 4%, so my account still seems heavily weighted towards a handful of loans. What percentages are #544 and #602 for you now registerme ? They are 0.6% and 2.6% respectively for me. I think the answer here is this is still work in progress. My figures on the loans you highlight are very different: #441 - 1.8% #544 - almost 12% #602 - 0% yes, nothing I too have a bunch of loans with high holdings, 9 at over 3% holding and 2 at +10% (#495 & #544), ignoring suspended loans This is still a major improvement from where we were and overall diversification has certainly improved but it seems we have not yet reached the even distribution state hoped for and some unpredictable behavior seems to be happening. In my case my largest non-suspended holding is #544 at 12% and the system was actually exchanging loans yesterday giving me even more of #544. How can that be chris when I have 12% of my holding in #544 and vaelin has only 0.6%? Edit: system increased my holding in #544 by over 2.5% yesterday with loan exchanges!
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happy
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Post by happy on Feb 24, 2018 16:28:52 GMT
Or lots of tins of baked beans and an underground bunker  |
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happy
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Post by happy on Feb 23, 2018 20:20:40 GMT
The PF is pointless: 1. It's supposed to cover capital yet it wont payout until the capital is recovered. If it's covering my capital, why can't I have the capital, why do I have to wait for recovery? 2. It covers interest payments but only late payments where receipt is imminent. Once the borrower actually defaults (or AC arbitrarily suspends the loan) the PF doesn't pay. As loans are suspended as soon as a borrower late pays and in some cases well before they default, the PF is only ever expected to cover pennies. 3. The PF is discretionary. That means AC can choose if they even use it so the rules above are 'discretionary'. As they like to market that the PF has never had to payout, likelihood is they wont ever use it. Assetz Capital attract lenders with the promise of the backup of a provision fund but make damm sure it will never have to payout. Firstly, Can I politely suggest you think carefully about changing the title of your thread as this looks suspiciously like trolling. EDIT: changed by mods. It has been explained time and again here to those that try and compare the PF of RS and (soon to be gone) Zopa with the likes of AC why they work differently. The AC PF protects you against any capital loss after secured assets are disposed of not against a default event which is what the RS PF protects you against. The protection against capital loss that AC asset secured loans together with a PF for the automated accounts provide is way beyond anything that the current RS PF provides with only barely enough cash and potential future contributions to cover todays expected debt. Any significant uptick on defaults will see the protection, and any confidence this PF provides to lenders disappear pretty quickly. I invest in both platforms but I understand the relative weakness that the RS PF offers. Just for the record RS have actually very recently changed the way their PF works regarding their larger property development loans meaning they do not get taken up by the PF but remain on the loan book so technically everyone who has a piece of that loan can only get out of it if someone else (unknowingly) buys them out. This includes new investors who will now actually (again unknowingly) buy parts of defaulted loans. So why did RS make this change? Answer, simply because their PF could not cope with even a small number of large loans defaulting and being repaid straight away as they do with other small loans. It would wipe the PF out in one go. So this is RS recognising that large asset backed loans are a problem for their existing PF model and personally I think their solution is a kludge and will probably be a short-term one if enough people realise they could be funding defaulted loans. Not sure what the FCA will make of it either. Edit: regarding your 3rd point, all P2P PFs are in fact discretionary otherwise it is considered an insurance against loss, that is an insurance product that is not able to be offered as part of the licence provided to P2P companies. Now if they all want to also take the time, resources and money to register as an insurance company and achieve regulatory approval for that then maybe they can remove the discretionary bit. It is the same as your pension trustees paying out a lump sum on your death, it is always discretionary otherwise it becomes, at least in part, a life assurance product which has different regulation, taxation rules etc. So in conclusion, please try to understand the differences we are dealing with here with the likes of AC, Lendy etc and accept that they will never work like RS.
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happy
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Post by happy on Feb 22, 2018 16:28:10 GMT
I think that may depend in part on the total number of loans that are currently invested in by the fund. So for instance the GEA is a little light on suitable loans right now so probably 20 loans giving a best-case diversification of around 4-5%, the GBBA has around 50 so best case around 2%, the PSA should be able to do better with more loans. This would be the case if all loans had the same amount invested in each fund but obviously this is not the case with some large loans making up a larger percentage of the total account holding. However everyone in that account should tend towards the same percentage holding in each loan.
An example of this from my GEA, my largest holding (ignoring the obvious suspended suspects!) was 13.5% of my GEA. after todays initial rebalance this has reduced to around 6%. The system may well get this down a bit lower but based on the loans in that account I doubt it will go down much more than this.
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happy
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Post by happy on Feb 22, 2018 12:20:37 GMT
The system is now live so you should start to see pairs of transactions on your statement following the format "Exchange loan unit in loan xxx (123) for loan xxx (456)", one being a credit for the old loan unit the other being a matching debit for the new loan unit. Exchanges have been happening on my GBBA2 account and imho it's a massive FAIL  . Earlier this morning, loan #441 had the second highest allocation, a very reasonable 2.83% of my GBBA2 money. The exchanges have added in excess of £500 to it, taking it to just over 7% !. There I was, naively thinking the exchanges would reduce the higher allocation percentages and it's done the exact reverse. I had been drip feeding money into GBBA2 and it had been going fairly much OK. With this new algorithm, I'm seriously considering selling the lot and withdrawing the money from AC to somebody like FC who (despite their faults) at least know how to do allocation properly.
Edit: I've put in a sell order for my entire GBBA2 holding. Maybe so but I'm not sure FC know how to do recovery very well at all. With a similar expected rate of return for FC unsecured and no PF vs. AC Secured+PF I know where I want my money and it isn't FC having lost more money to defaults there than AC , with less than 10% of the investment I have in AC. ( all losses in MLA loans, never lost anything in the AC automated accounts)
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happy
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Post by happy on Feb 22, 2018 10:07:12 GMT
The system is now live so you should start to see pairs of transactions on your statement following the format "Exchange loan unit in loan xxx (123) for loan xxx (456)", one being a credit for the old loan unit the other being a matching debit for the new loan unit. Just taken a look and yes this is happening now on my GEA and GBBA2 accounts, nothing yet on the GBBA or PSA. looking forward to doing a comparison of the loan holdings in a few days. Trades seem to be mostly £10-£25 or so with the odd one around £75 so it does not look to be creating micro-units like we have had in the past. Looking good so far, thank you chris
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happy
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Post by happy on Feb 21, 2018 17:49:32 GMT
**PLEASE NOTE THIS LOAN WILL NO LONGER BE PROCEEDING AND WILL BE REMOVED FROM THE PLATFORM SHORTLY** This message now on the pipeline. Good news for everyone I think. So, about 3 years ago I was doing my pre-investment platform DD on SavingStream as it was then and I was reviewing the current loans and the pipeline. I remember very well at the time a Million Pounds plus loan was being offered for pre-funding that consisted of basically a field that was apparently a dead cert for being able to be turned into a graveyard and came complete with a "professional" "independent" valuation indicating plots would easily sell at something like £8-10k if I remember correctly. After some fairly in-depth DD done here by forum members it turns out that these plots would be lucky to get 50% of the professional valuation rendering the basis of the whole loan unsound. Once this information was published on the forum SS quickly withdrew the loan offer for it never to return. It was this event that made me put my investment plans in SS on hold and after one or two similar episodes that followed I decided not to invest as despite the lure of 12% I did not trust the basis of their loans enough. So I ask myself, has anything changed? Is that a leopard I see in the shadows?
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happy
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Post by happy on Feb 20, 2018 16:23:32 GMT
Fascinating (for an observer). Self interest says that turkeys should not vote for Xmas, but here perhaps we are considering altruistic turkeys? The turkey who believes that, Xmas or not, they are going to be killed and eaten anyway, is free to consider the bigger picture. They can vote for Xmas so that all the turkey chicks in the world are not deprived, by their selfish abstaining, of their Xmas gift from Santa (hopefully). I don't think that's quite right and I don't want to labour this point but perhaps an example might help. Let's say after 2 years of no payments £100,000 was owing and the borrower offered £90,000 (consisting of £50,000 from him and £40,000 from his brother) and AC sent out an email saying to choose between: A) accept the £90,000 in full and final settlement, or B) take the borrower to court and bankruptcy. and lets say that the majority vote is for "B" and the borrower is bankrupted, other debts arise, and AC get £20,000 from him. Any lender, who lent via a PF account, who chose A, because they thought they would have got a better recovery won't get any compensation from the PF. This kind of result means the lender shouldn't vote according to what they think is the right thing to do or what they think will get them the best recovery but should vote according to what they think the majority vote will be for. i.e. vote tactically, just like a general election. Or they could just choose to not vote at all. As an aside, I always used to vote "A" because I think that AC used to put their most reasonable option first. I'm not sure they actually do. I'm mostly MLIA currently so the above doesn't really apply to me but it certainly applies to various people I've suggested should open a "passive" AC account/ISA and I've told them all to never vote. I thought that AC indicated that they would make it clear if any vote situation arose where potential PF payout would be potentially affected by voting one way of another. So AIUI until AC tell me to factor the PF protection into my thinking I don't have too. On the subject of Turkeys voting for Christmas, what I don't think has been mentioned so far in this discussion is that many of us will be both the turkey and Santa Claus when voting if we have both MLA and automated account holdings in any loan being voted on. Could get tricky working that one out come the time.
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happy
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Post by happy on Feb 16, 2018 16:51:31 GMT
Massive part repayment of principal within the last hour. That's another 12% loan which will have to be replaced with a far lower rate  . Not many left now are there but don't get too grumpy. I've just opened a nice bottle of Malbec, it will certainly help ease the disappointment somewhat
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happy
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Post by happy on Feb 16, 2018 16:25:06 GMT
I have followed a similar strategy to the one you suggested vaelin and invested in the MLA with a mid 5 figure investment in around 300 loans. Without the PF protection I have adopted a capital risk reduction strategy as follows: assuming I am happy with the basis of the loan and exit strategy I utilise a formula that factors in the LTV, the asset type (residential, commercial, land, etc) and the underlying business type to assess what I am going to invest in. Add to that my gut-feel 'how much do I like the loan' as a percentage and I then invest that amount. So for example, for higher LTV loans to hotels, restaurants and pubs I may only invest sub £100 but for a low LTV residential BTL outside London or solid business releasing equity from an unencumbered property I will more happily lend into 4 figures. It does mean I typically invest a lot less in the higher rate loans but overall I think my risks are much reduced So far I am returning just under 8% with only 0.3% of loans currently in default and likely capital losses of around £60 after over 2 years investing so not so bad. |
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happy
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Post by happy on Feb 13, 2018 19:42:38 GMT
blah blah blah .. according to the last email sent to lenders last November. blah blah blah Would that be the e-mail that specifically requested recipients not to reveal the contents in full or in part as it could damage the recovery strategy and have a negative impact on realisations? And not for the first time either unfortunately.......
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happy
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Post by happy on Feb 13, 2018 17:41:51 GMT
Loan #330 is a prime example of a loan in default where the principal should immediately be refunded to lenders from the PF, but I can't see it happening. Why do you think that the AC PF should pay out on this or any other loan immediately? I have never seen anything that remotely suggests they have ever stated they should pay out on loans protected by the PF when the loan defaults,. Please try to understand the PF protects you against capital loss not against a loan default event and we have no right to access to our capital or to get any of our money back until the underlying security is recovered. To suggest otherwise is pure fantasy. This is SME P2P and defaults happen, your investment gets locked up pending recovery and hopefully you don't loose any of you capital. It happens not just here at AC but all other platforms like it as far as I know. If you cannot accept that then IMO you should not be lending here.
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happy
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Post by happy on Feb 8, 2018 19:34:44 GMT
It will take a while for the loan to filter into the MLA GBBA etc. Initial draw-down via the QAA/30Day and then distribution to the other accounts is a 2-step process and sometimes takes a few days or more. I understand there are manual points of intervention require to help it trickle into the system. If there is nothing in a few days it would be worth a message to AC however more often that not it does work ok albeit slowly
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happy
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Post by happy on Feb 8, 2018 16:08:00 GMT
Has Assetz had any defaults where investors have lost money? Or are the defaults still working through the system? In the provision fund protected accounts on AC there has been no loss of capital declared yet on any loan but there are loans in default which are as you say are 'working through the system' but yet to crystallise any loss, it is expected the PF would pay out to cover any capital loss at this point but not before. To date the PF has not covered interest payments during any default but this is set to change in the coming weeks with all payments covered from the PF. Once this PF interest payment kicks in then nobody will have actually any lost capital or interest on these protected account but there is obviously money locked into defaulted loans pending completion of the asset recovery process. This locked money in PF protected accounts is the source of a lot of bad feeling and anger towards AC with some posters here who expect the AC FP to work like just RS or Zopa Safeguard and take over loans at the point of default and repay all capital immediately. This was never how the AC PF was designed to work, or the Lendy PF either for that matter, and it will never work that way due to the fundamentally different nature of the underlying business models and loan books. I am currently working on an analysis and write-up of the RS and AC PFs to explain this more fully which I will post here and on the RS and AC pages.
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. Earlier this morning, loan #441 had the second highest allocation, a very reasonable 2.83% of my GBBA2 money. The exchanges have added in excess of £500 to it, taking it to just over 7% !. There I was, naively thinking the exchanges would reduce the higher allocation percentages and it's done the exact reverse.
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