Peer to Peer Lending - Anyone managed to get Money Out?

NorthernJoe

Hope everyone has success but this is probably the first economic downturn in which P2P will be properly tested

jefm

Ratesetter- Am i going to get my money back. asked for release on 17th March- still waiting 6 months on?. Every week 3000 people still ahead of me in the Queue. Now acquired by Metro. have written to the CEO and Customer services a number of times same old answer. Is there anything I can do? 

Thrugelmir

jefm said:

Ratesetter- Am i going to get my money back. asked for release on 17th March- still waiting 6 months on?. Every week 3000 people still ahead of me in the Queue. Now acquired by Metro. have written to the CEO and Customer services a number of times same old answer. Is there anything I can do? 

Wait. There's no other answer unfortunately. Chalk it up to experience. 

DireEmblem

This highlights one of the potential downfalls of p2p that all should be aware of.  You are essentially lending people directly rather than a bank, so in order to get your money out, you need others willing to put money in, essentially a 'switch', and the loan remains unchanged from the view of the borrower.

With everything happening this year, its probably safe to say that all p2p providers have probably had a massive increase in people like yourself requesting funds back.  I haven't used RateSetter to date, but the post at the top of their site re COVID makes sense.  For the benefit of all investors on average, put 50% into the protection fund to cover defaults so if that was the case, everyone takes a fair share.

That being said, if there is no defaults, then RateSetter need a mechanism in say a years time, to pay back a portion of the 50% reduced interest.

I might have been lucky, I used to use Zopa, and achieved good returns however took my loans out Q4 2020.  I think I have £9 left to sell.

Aceace

The problem with Ratesetter's "mutualisation of risk" model is that it essentially breaks down in the current situation where they are effectively in wind-down mode for retail customers. They're allowing some to escape with all capital and profits intact, leaving an ever decreasing pool of loans with an ever increasing risk of defaults to be shared among those that are left trapped.

Fortunately for those that read these forums, they will be aware that the only sensible option available is to request an RYI for all funds on the platform, set the reinvestment rates as high as possible to reduce the likelyhood of repayments being relent, and log in often to remove any funds on market. The majority of lenders are likely to be unaware of their concentrating risk until the next cut in interest rate email arrives and eventual capital haircut.

All IMO of course, but does anyone belive RS's forecast that the current 50% interest rate cut will be sufficient to return the PF to 100% ICR by December? It seems rather incredible to me given that it hasn't improved at all yet and most of the covid effects on borrowers ability to pay are yet to be felt. I'm not expecting major capital losses, but I fail to see how they will be avoided completely.

Having said all of that, I'm bullish for P2P as an investment class in general. There are plenty of good platforms offering a very good risk/reward combination. There are also lots of very poor platforms for which the FCA have been sadly lacking in its regulatory duties, so great care is needed when selecting which platforms to invest in. 

Grogged

I was invested with Zopa and still have a small holding in RS.
I much prefer the Zopa repayment model, which is to distribute small payments to everyone in the queue, rather than those that asked first.
At least everyone shares both the benefits and the ongoing risks.
But being in the wait for over a year club for the reminder of my funds with RS I would say that! 😆

masonic

The Assetz Capital model seems the best way do deal with this situation. Have a proper secondary market where people can offer their investments up to others at a discount. There seems to be a lot of money available to buy in at a 6-10% discount, which means those who really need their money back can recover the vast majority of it without waiting months or years, while those content to remain invested can sit it out.

Imagine what a state the corporate bond markets would be in if people could only trade them at face value. I guess there is also an analogy with holding illiquid assets in an open ended fund that can only trade at NAV and which therefore may have to suspend redemptions vs an investment trust with a fixed pool of capital and the ability to trade at a premium or discount to maintain liquidity.

agent69

masonic said:

The Assetz Capital model seems the best way do deal with this situation. Have a proper secondary market where people can offer their investments up to others at a discount. There seems to be a lot of money available to buy in at a 6-10% discount, which means those who really need their money back can recover the vast majority of it without waiting months or years, while those content to remain invested can sit it out.

Imagine what a state the corporate bond markets would be in if people could only trade them at face value. I guess there is also an analogy with holding illiquid assets in an open ended fund that can only trade at NAV and which therefore may have to suspend redemptions vs an investment trust with a fixed pool of capital and the ability to trade at a premium or discount to maintain liquidity.

The problem for sellers is that there is less than £100k of buyers, compared to several million waiting to be sold.

bigadaj

agent69 said:

masonic said:

The Assetz Capital model seems the best way do deal with this situation. Have a proper secondary market where people can offer their investments up to others at a discount. There seems to be a lot of money available to buy in at a 6-10% discount, which means those who really need their money back can recover the vast majority of it without waiting months or years, while those content to remain invested can sit it out.

Imagine what a state the corporate bond markets would be in if people could only trade them at face value. I guess there is also an analogy with holding illiquid assets in an open ended fund that can only trade at NAV and which therefore may have to suspend redemptions vs an investment trust with a fixed pool of capital and the ability to trade at a premium or discount to maintain liquidity.

The problem for sellers is that there is less than £100k of buyers, compared to several million waiting to be sold.

I think you are conflating the issues. The ability to discount would mean it would be more attractive to buyers and a price would be reached at which people would be happy to sell and others to buy. Whether that number is the same is a different matter but it would allow people to exit if they wanted whilst taking a haircut.

masonic

agent69 said:

masonic said:

The Assetz Capital model seems the best way do deal with this situation. Have a proper secondary market where people can offer their investments up to others at a discount. There seems to be a lot of money available to buy in at a 6-10% discount, which means those who really need their money back can recover the vast majority of it without waiting months or years, while those content to remain invested can sit it out.

Imagine what a state the corporate bond markets would be in if people could only trade them at face value. I guess there is also an analogy with holding illiquid assets in an open ended fund that can only trade at NAV and which therefore may have to suspend redemptions vs an investment trust with a fixed pool of capital and the ability to trade at a premium or discount to maintain liquidity.

The problem for sellers is that there is less than £100k of buyers, compared to several million waiting to be sold.

Yes, in any market there may be many times the volume listed via offers that are well away from the market price. Those who really want to sell need to adjust their offers so that they move to the front of the queue. Much of the funds listed for sale are not needed urgently and are being slowly repaid at par through redemptions.

I have all of my investments listed for sale at par at any time I'm not actively buying. I am looking to reinvest any repayments at a discount, and gradually move some of them back into the MLIA, but am not looking to (further) reduce my holdings overall.

For the same reason I do not routinely have any bids listed. However, if the market price moves to an attractive level, I have and will buy up some of the best offers available.