P2P: Saving Stream (AKA SavingStream)
Options
Comments
-
its an open forum so no names are used, everyone that wants to know more needs only look on the SS live loans or pipeline loans page to get more info.
But the people on that thread appear to have been totally unaware of who their money was being lent to, i.e. Desmond Philips, despite having access to the SS live loans and pipeline pages.
I can go on Morningstar and print out the full list of every single company my chosen fund manager invests in. I wouldn't touch with a bargepole any fund manager that refused to tell me which companies it had invested my money in.someone borrowing money doesnt want their competition to know how they are getting the cash together. not all info is available on SS and that causes some angst. sometimes you have to trust the platform to do its job or dont invest. same with fund managers really.
The P2P pitch requires us to assume that the investor can make informed decisions about which businesses and individuals he should lend his money to without the hated middlemen doing it for him. Yet here we have a platform which leaves its investors in the dark about who they are lending their money to, which means any notion of due diligence immediately falls apart.
If you are happy to trust a platform to "do its job" and to surrender control over who your money gets loaned to, you might as well invest in a high yield corporate bond fund with considerably lower risk and higher diversification, liquidity and transparency.0 -
I've decided to sell off what little I have invested and leave SS to braver souls with deeper pockets. I just don't see it ending well.
Looking at their mounting catalogue of delayed completions and the associated SS regular updates repeatedly detailing imminent settlement in days, now months old in quite a few cases, is causing me enough concern to walk away from this.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
The loan information on the SS website for the loan in question names Agricultural Properties Limited as the borrower and a quick Companies House check will reveal Desmond Phillips as a former director. TBH, the identity of the brains behind the operation is not the biggest problem with this loan IMHO.Malthusian wrote: »But the people on that thread appear to have been totally unaware of who their money was being lent to, i.e. Desmond Philips, despite having access to the SS live loans and pipeline pages.
However, there is another loan on SS linked to Desmond Phillips in which there is no information about the borrower and it was one in which I was formerly invested. This was revealed through the thread on the farming forum. Fortunately I was able to quietly exit it some time ago (in fact before any of this news broke) and I never held any of the other loan.
Really? There are a number of funds I invest in for which I'm only able to see the top 10 or top 20 constituents. In fact, Woodford Equity Income is the only one I'm aware of that publishes a full list of constituents and was lauded for the fact it does so.I can go on Morningstar and print out the full list of every single company my chosen fund manager invests in. I wouldn't touch with a bargepole any fund manager that refused to tell me which companies it had invested my money in.
I would be quite concerned about holding bonds in a fund - especially an open ended fund. While I know interest rates are once more on the decline, which will push up prices in the short term, with inflation picking up, we could see interest rate rises in the medium term. It is probably a bit of an overreaction to eschew P2P completely on the basis of the bad behaviour of just one platform.If you are happy to trust a platform to "do its job" and to surrender control over who your money gets loaned to, you might as well invest in a high yield corporate bond fund with considerably lower risk and higher diversification, liquidity and transparency.0 -
Really? There are a number of funds I invest in for which I'm only able to see the top 10 or top 20 constituents.
Monthly factsheets generally only show the top 10 but nonetheless the full list is available through systems like Morningstar if you have a full subscription, usually updated quarterly. You can also easily get a full list of holdings for free from the annual report, although it will be a bit less up to date. Even if you don't want to pay for a full subscription to Morningstar, I imagine the fund manager would be perfectly happy to supply you with the same list they supply to Morningstar if you rang them up and told them you wanted to have a look before you invested.
Which says more about the laziness of journalists than it does about Woodford. They aren't doing anything that virtually all investment funds in the UK do already.In fact, Woodford Equity Income is the only one I'm aware of that publishes a full list of constituents and was lauded for the fact it does so.
Which will affect P2P loans in exactly the same way it will affect corporate loans. If the base rate goes up to 1% then a 13% return from a P2P loan is no longer as attractive just as a 6% return from a corporate bond is no longer as attractive, and their value will fall. You just won't be able to see the effect on their value as easily because they are illiquid and not repriced constantly on the stockmarket.I would be quite concerned about holding bonds in a fund - especially an open ended fund. While I know interest rates are once more on the decline, which will push up prices in the short term, with inflation picking up, we could see interest rate rises in the medium term.0 -
Malthusian wrote: »Which says more about the laziness of journalists than it does about Woodford. They aren't doing anything that virtually all investment funds in the UK do already..
Woodford publishes the full portfolios and performance contributions, updated monthly, on his website. You just have to register in order to view them. Seems more transparent than having to pay for a MorningStar subscription or contact a fund manager directly. If Woodford can make it simple then I assume every other manager could, too.0 -
That seems to be the same problem then. The information is there if you are prepared to do the work or pay extra for it. How many investors will actually do this? Not many I'd think. SavingStream seems to be quite forthcoming with supplementary information for people who ask questions about loans, but again, not many people do so.Malthusian wrote: »Monthly factsheets generally only show the top 10 but nonetheless the full list is available through systems like Morningstar if you have a full subscription, usually updated quarterly. You can also easily get a full list of holdings for free from the annual report, although it will be a bit less up to date. Even if you don't want to pay for a full subscription to Morningstar, I imagine the fund manager would be perfectly happy to supply you with the same list they supply to Morningstar if you rang them up and told them you wanted to have a look before you invested.
If your P2P loans were held in a fund and those underlying loans were tradeable at a premium/discount. Managed portfolios of P2P loans do exist (not on SavingStream), but loans are pretty much always held to maturity IIUC. Some platforms do allow loans to be traded at a price determined by buyers and sellers (not SavingStream though). I still think there is a downward pressure on P2P rates that is not affected by interest rates, but I've not really considered whether that would make a hypothetical P2P loan fund less exposed to rising base rates. More of a concern would be the inability to satisfy redemptions from a P2P loan fund if it saw a mass exodus. I said I would be quite concerned about holding bonds in a fund, and that goes for P2P loans as well.Which will affect P2P loans in exactly the same way it will affect corporate loans. If the base rate goes up to 1% then a 13% return from a P2P loan is no longer as attractive just as a 6% return from a corporate bond is no longer as attractive, and their value will fall. You just won't be able to see the effect on their value as easily because they are illiquid and not repriced constantly on the stockmarket.0 -
Here's a cute example of the sort of thing that Saving Stream does. A loan is being refinanced from MoneyThing to SavingStream so we can compare the two.
MoneyThing: Loan value £2.2 million (5 parts) vs asset value of £4.15 million and LTV for all combined 60.1% (account needed to follow link).
SavingStream: Loan value £3.4 million. Gross development value £16.8 million. LT GDV 20%.
GDV is the projected future value once the whole project is completed not the actual value of the security at the time the loan is made.
From which we can surmise that the actual value of the security today is around £4.5 million and the SavingStream 20% LTV isn't going to be anywhere close to reality if there's a default unless it's very close to or after completion of the project and accurate based on market conditions at that future date.
Somewhere SavingStream might be disclosing what MoneyThing did when explaining why they asked the borrower to refinance: that it'll take something like £7-8 million of borrowing to get the project complete.
There is apparently much more information in the full loan details and someone has suggested that they think it's the most comprehensive information they have ever provided, which would be an extremely welcome change if it applies to other loans as well! So do go and read those instead of just relying on the loan list information, it's your money that you could end up saving.
Don't trust the initial apparent value of security at SavingStream. It's not a reliable indication of the level of asset you're lending against.
Instead, look at any valuation and check these things carefully:
1. what it says about planning permission, if anything. It might just say something like the value being "with all permissions" instead of giving you clear warning that planning permission has not been obtained yet and may never be. Your money may be spent on preparatory works, studies and appeals without ever getting to anything worth more than the bare land with some holes made in it.
2. whether it's the value today or some assumed future value.
3. whether it's the full market value with unlimited selling time or the 90 day valuation that is likely to be 10-30% lower for quick sale after a default. The 90 day one is the one that matters to you after default unless you want SavingStream to be potentially spending a year or more selling the property.
4. whether you think there will be a market for say a half completed project that may take a lot of additional borrowing to complete after a default. You may have seen the cheap auction deals on property shows where someone got a bargain after a developer ran out of money part way through a build. That's you as the effective seller if there's a default before completion. If the security value is the one today you may be fine, unless something worth money has to be demolished first, reducing the value for a while. If it's the potential future value that's more of an issue.0 -
Agree 20% is misleading, however, 4.5m value with a 3.4m loan is still around the 70% ltv saving stream aim for and so is likely to still attract a full house, even after the due diligence has been done.0
-
Teh interesting thing is that the weight of money entering now means that there is no immediate pressure on the platforms to be particularly open or be questioned in their due diligence.
This will remain the case until there are larger defaults more frequently.
Most offerings fill up very quickly, often within a few hours and even where there are limits on individual contributions.
The pre funding offering from saving Stream is a positive for me, allowing you to invest, I've had situations with money thing where I've credited, had to wait for this to hit my account and then come back after work to find the offering filled.
However their loans page is embarrassing with a litany of overdue accounts, seems to me as much naivety as incompetence.
I have some small loans with them but am more wary than with Moneything and one or two other providers.0 -
I've decided to hold on to a relatively small, capped investment with SS. Sticking to a strategy of blanket coverage, incremental reductions as the completion approaches, followed by a complete disposal at about two months to go, in the hope of avoiding the window in which a loan is more likely to default and the inevitable flood of disposals hit the secondary market.
I'm looking at doing similar with moneything, I prefer their account portal to SS.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards