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

Albermarle

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 understood that there was more 'buying money' to begin with, but probably it was a finite source from a relatively small number of people active on Assetz . It is quite a niche activity to be buying up loans at a discount on a P2P site . 
I suspect even if discounts went up more there would just not be enough money available to get these queued up millions moving . Unless some very big hitter/institutional money came along .

bigadaj

Albermarle said:

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 understood that there was more 'buying money' to begin with, but probably it was a finite source from a relatively small number of people active on Assetz . It is quite a niche activity to be buying up loans at a discount on a P2P site . 
I suspect even if discounts went up more there would just not be enough money available to get these queued up millions moving . Unless some very big hitter/institutional money came along .

I think you are quoting a poster who doesn't understand the principle behind a variable price market and is simply quoting the single price buy/ sell that is leading to the stagnant market in ratesetter, I don't know AC but I am active on Ablrate and that market works well. Only a handful of defaults on ablrate and market can and does move from a typical 10% discount to maybe a 5% premium dependent on demand, though discounts up to 25% are allowable. A slight criticism I would have of ablrate is the lengths they go to to try and save some of the loan, or really the extent to which they do so; a lot of management time and effort going into loans to reschedule and refinance but has been effective so far. 

masonic

Albermarle said:

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 understood that there was more 'buying money' to begin with, but probably it was a finite source from a relatively small number of people active on Assetz . It is quite a niche activity to be buying up loans at a discount on a P2P site . 
I suspect even if discounts went up more there would just not be enough money available to get these queued up millions moving . Unless some very big hitter/institutional money came along .

In the first couple of weeks there was certainly evidence of some quite frenzied buying going on that drove discounts down to quite a low level. That's probably to be expected of a feature that had been a long time coming - I'd imagine anyone with money to invest would have held off for the chance to buy at a discount. That initial bolus of money looking to be invested quickly seems to have cleared and bids seem to better reflect reality. Still, apart from a few anomolies, discounts have been typically below the point I'd consider the return to adequately compensate an investor for the risk.

If investors are following sound principles, they should be investing money that is not needed in the short term, money which they can afford to lose, and limiting their investment in any single platform to a small proportion of their total assets. Thus most investors should not be forced sellers, but there are obviously certain cases where someone's circumstances change and they are put in financial hardship, so they need to recover whatever they can be selling their investments at whatever someone else will pay for them. People will obviously also use such a SM to crystallise a smaller loss now to avoid a potentially larger loss in the future, or when buying to compensate themselves for taking on a loan book that will likely expose them to future losses.

It is the former group who I'd consider to be the main beneficiaries of a variable price market, I'd agree that the latter group (especially the traders) are engaging in more of a niche activity.

At the moment it is sensible for all investors to put all of their holdings up for sale on the SM so as to receive repayments that can be invested at a discount, so this is probably distorting the sale queue, which probably contains a vastly smaller amount listed by those who desperately need to pull their money out.

Albermarle

bigadaj said:

Albermarle said:

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 understood that there was more 'buying money' to begin with, but probably it was a finite source from a relatively small number of people active on Assetz . It is quite a niche activity to be buying up loans at a discount on a P2P site . 
I suspect even if discounts went up more there would just not be enough money available to get these queued up millions moving . Unless some very big hitter/institutional money came along .

I think you are quoting a poster who doesn't understand the principle behind a variable price market and is simply quoting the single price buy/ sell that is leading to the stagnant market in ratesetter, I don't know AC but I am active on Ablrate and that market works well. Only a handful of defaults on ablrate and market can and does move from a typical 10% discount to maybe a 5% premium dependent on demand, though discounts up to 25% are allowable. A slight criticism I would have of ablrate is the lengths they go to to try and save some of the loan, or really the extent to which they do so; a lot of management time and effort going into loans to reschedule and refinance but has been effective so far. 

No, I was interpreting some of the comments on the AC section on the P2P Independent forum. Plus I am a modest AC investor so have taken an interest.
I would not be tempted to buy at a discount in the access accounts unless the discount was minimum 15% . I can not say where this figure has been arrived at , just gut feeling