To continue to hold Zopa and Ratesetter?

sebtomato

Albermarle wrote: »

I would think Assetz is one of the stronger platforms, would be more than a bit surprised to see them go down .

Assetz Capital have closed a lot of their loan accounts (e.g. Property Secured Account/PSA, Great British Business Account/GBA etc.) and it takes a long time (months) to sell some of the existing loans. Those two facts mean lots of sellers and not many buyers.

I used to have a fairly large amount nvested with them, and wanted to sell everything/as much as possible once the first few P2P platforms went to administratiion (as I was expecting a domino effect across the P2P platforms). I sold the first 2/3 fairly quickly at a discount (weeks) and the last third hasn't moved much for 5-6 months now. Clearly, there is no liquidity in their marketplace, some of the remaining loans are overdue/in default (some have been in default for years and still not recovered) and it may take years to get some of that money back.

Despite their name (Assets Capital), I am not actually sure many of the older loans are actually as secure on tangible assets as Assetz Capital had advised, so there is significant risk of losing capital (and also several years of unpaid interest on such loans).

I am surely not investing with AC ever again, and many people would do the same as what I have done.

Existing customers winding down their investments and not many new customers coming cannot be good news for any company, and P2P lending is now seen as very negative overall, given the lower actual returns/interests and significant risk of capital losses, even for platforms with so-called secured loans (against assets).

I don't think many P2P companies are going to survive this. Not many people are going to do further investments in P2P for the remote prospect to earn 4% interest with a large risk of capital loss, and/or for such capital to be locked in for years in case of defaults.

Funding Circle has also some large liquidity issues, and it will take months/years for existing customers to sell their loans (or they will have to wait for such loans to come to completion). FC is much bigger than AC, and also had a lot of government investments, so maybe they are a bit safer for now.

DireEmblem

I’m also winding down on Zopa, it’s been great for diversification, but am now thinking of bagging the signup bonus on Quidco for Ratesetter, and investing the rest. As others have said, the returns are dropping, and the fact that unlike holding investments, you will most likely not recover any losses.

Albermarle

and it takes a long time (months) to sell some of the existing loans.

I put 10 loans up for sale last week , so I could switch the cash from standard to IFISA account . They all sold in 24 hours with no discount , although they were not large amounts .

sebtomato

Albermarle wrote: »

I put 10 loans up for sale last week , so I could switch the cash from standard to IFISA account . They all sold in 24 hours with no discount , although they were not large amounts .

Not everybody will get the same experience. How long have you been a customer? When did you buy those loans? Did you sell at a discount?

It's the longer term customers and older loans that are going to be most impacted, since some of the initial loans didn't have the same due diligence applied to what they are doing now. Once a first few loans went to default and money couldn't be recovered, Assetz Capital changed their processes quite a bit (after being overly confident)...

In the meantime, they still have many loans that have been in default for years, and very little money recovered yet in many cases... If you have bought some loan parts from those loans a couple of years ago, your money would be stuck for years, not paying the original interests, earning no interest since and with some capital loss prospect.

Money_Grabber13579

I’m continuing to hold Zopa for now but I am in the process of winding down ratesetter (due to what is effectively a 2.5% reduction in available rates) and got out of funding circle (except for £20) just before the long delays on selling loans came about. I would agree with those who are of the opinion that the smallish return is no longer worth the risk.

masonic

sebtomato wrote: »

It's the longer term customers and older loans that are going to be most impacted, since some of the initial loans didn't have the same due diligence applied to what they are doing now. Once a first few loans went to default and money couldn't be recovered, Assetz Capital changed their processes quite a bit (after being overly confident)...

I've been using AC since 2015 and bought into some of the older vintage loans when I started out, so have been impacted by some of the issues you mention - in particular a loan in which there was no tangible security and which looks as though it is ultimately going to deliver a 100% loss. But that loan sticks out like a sore thumb and I've generally experienced very few defaults on the platform, and of those few, I've ended up losing very little.

I've not liked the rates on offer for recent loans, so have invested in very few of them, so my remaining portfolio consists mainly of older loans of which only 1 is currently in default and the majority of which I was able to sell quite easily (some of which I repurchased in my IFISA).

I'm in the process of winding down my P2P investments in general, but I don't see much evidence that AC is in a particularly weak position, especially with the buffer of its Access accounts. Indeed, I've been able to halve my exposure in the past few months without too much trouble and aside from the defaulted loan mentioned above from which I don't expect any recovery, I don't hold anything that isn't moving on the SM.

In the meantime, they still have many loans that have been in default for years, and very little money recovered yet in many cases... If you have bought some loan parts from those loans a couple of years ago, your money would be stuck for years, not paying the original interests, earning no interest since and with some capital loss prospect.

These are of course the risks of investing in P2P, but I've had little trouble with this at AC vs. other platforms such as FS and MT where I have significant numbers of loans in default. Perhaps I've just been lucky at AC.

sebtomato

masonic wrote: »

Indeed, I've been able to halve my exposure in the past few months without too much trouble and aside from the defaulted loan mentioned above from which I don't expect any recovery, I don't hold anything that isn't moving on the SM

Yes, circumstances can be different depending on which loans you had invested in.

Because the negative press on P2P and recent wave of companies going into administration, I am pretty sure all P2P companies are suffering badly, losing customers and have negative cash flows, so the domino effect may apply.

I am getting out of P2P entirely for now, until the market consolidation is done and only the fittest company stay standing. Like any new industry/market, it's the expected cycle, coming to maturity.

Luckily, I managed to sell most of my loans from FS and Lendy before they went into administration, and I am now trying to get out of AC and FC, which is taking significant time. I got out of Zopa and Ratesetter very easily and quickly, meaning they still have customers investing money and buying my loans.

ianthy

I have investments in Zopa, Ratesetter for the last 6 years and Bond Mason and Lending Circle for the last 3 years. I am in the process of running down the funds. To be fair, I have not lost any money or suffered any defaults but feel the risk V reward is no longer there.