Gli Finance Share Discussion Threads

[grahamg8] 16/2/2016 07:55

Refreshingly clear RNS. It looks as if it wasn't only the shareholders who hadn't a clue what was going on but the Director didn't either. Lot's of work to do but heading in the right direction at last.

[future financier] 12/2/2016 08:44

.... and lets face it his record isn't stellar - he has only got where he is (or was) because his face fitted and he said what politicians wanted to hear.

But I do agree that the P2P losses on lending to corporates could end up being far higher than lenders expect. Also that there will be consolidation of P2P lenders in the asset backed (including mortgages) market as the market cannot support the overheads associated with so many lenders.

[specuvestor] 12/2/2016 08:03

Aider Turners sensationalist comments during his interview on the BBC Today programme were made to promote his new book.

[my retirement fund] 12/2/2016 03:24

The UK’s peer-to-peer lending industry took fire yesterday from none other than former FSA chief Lord Adair Turner, who predicted that “the losses which will emerge from peer-to-peer lending over the next five to 10 years will make the worst bankers look like lending geniuses”.

[james188] 09/2/2016 16:38

On the question of what value Somerston may be able to bring to GLI's operations (and GLAF)- aside from the cash injection to replace the existing expensive Sancus loan - I believe that part of the thinking is that Somerston has been backed by family office investors and that it has strong contacts in that area. As such, it should be able to effect introductions for GLI to new potential funding sources. It will be interesting to see how and to what extent the relationship with Somerston develops.

[cerrito] 09/2/2016 12:13

Just read this in the GLAF monthly statement just out
anyone knows what they are talking about?
If they had low loan origination and no negative impact on income that means to me that they had little cash but obviously not the case here
quote
January proved to be a fairly quiet month in terms of loan origination, however with cash levels in the
Fund running at mid-single digits, this has not had a negative impact on the income generation
unquote

[cerrito] 08/2/2016 23:57

Like Valhamos I always thought GLI lent direct and it all goes to show the need for more information for people to want to buy.
Interested to read that Somerston had had no previous commercial relationship with GLIF/Sancus; also having read their website not quite sure what value added they will bring to the work as a strategic partner to expand GIAF.
Incidentally I see that like last year they will be an exhibitor at the April 30 Master Investor show.

[james188] 08/2/2016 19:40

Valhamos,

Whilst I do not know the loan terms, I would confidently expect/hope that any default at the platform/end borrower loan level would very rapidly translate into a default at the GLIF/platform loan level. That would be logical, given that the platforms are largely conduits for GLIF loans, although there are exceptions. I have lobbied GLIF for some time to give further details as to the platform loan arrangements, because I think that greater transparency would increase confidence.

All that said, I am much more interested in the value of the equity investments. I very much doubt that the loan book is a major concern.

[valhamos] 08/2/2016 19:05

James

"the borrower is the relevant platform and the credit counterparty."

On that basis what sense do you make of the comment in the trading update of 17 November:

"GLI's direct lending activity is complementary to its investment in the Platforms enhancing their ability to attract borrowers and providing loan origination channels for GLI which generated interest at an average rate of around 10% on its portfolio during the nine months ended 30 September 2015. Loan losses/provisions were approximately 0.7% of the closing loan book during the nine months ended September 2015."

If the platform is the credit counterparty how have these loan losses arisen in the absence of any credit events (e.g. default) as far as I am aware?

[james188] 08/2/2016 18:11

Whilst I think that there are rather more important issues to focus on, my understanding is that most of the loans made by GLIF have been TO (not through, meaning lending side by side with or where the platform is not a principal)the platform companies, who have then used those funds to lend to end borrowers. So, the borrower is the relevant platform and the credit counterparty.

That analysis is supported by the detail in the notes to the last published accounts we have for the period ended 30 June 2015 and also the info contained in the September 2015 GAF Prospectus, which noted that most of the Initial Portfolio being injected into the Fund comprised loan facilities to the investeee platforms. Loans made by GLIF to a non-GlIf platform (Legion Trade Finance) were a very notable exception.

That is typically how I would expect things to be structured, although technically it would of course have been possible for the end borrower to be the direct credit, with the platform simply structuring the deal rather than acting as principal. I think that GLIF typically expects the platforms to do the legwork and deploy the cash injected on sensible terms, subject to overriding controls on lending by the platforms that GLIF imposes. We do not know the precise details of the loans/conversion rights etc in the GLIF/platform loans, so speculation as to the status of those loans is just that, unless there is very clear evidence that the value of the loans placed by GLIF in the last asset update is materially wrong. Assuming (without very clear evidence)a 100% level of default on the loans is simply not worthy of comment. The loan book acquired by GLAF from GLIF seems to be performing well.

Confirmation today of the terms of the Somerston deal brings some welcome and much needed certainty, although there is clearly further work to do - e.g. the GLAF fundraising.

[valhamos] 08/2/2016 17:34

Not sure if these links have been posted before

hxxp://www.altfi.com/data/indices/UKvolume
hxxp://www.altfi.com/data/indices/EURvolume

Useful to see the progress of some of the GLIF platforms. Size of loan book/market share is not necessarily a guide to profitability and it is worth considering the growth rates as well as overall size. So for instance Funding Knight really needs to have a loan book at least twice its current size (£29.6m)but it is heading in the right direction with a growth rate of 186% in the last 12 months. Finexkap also is showing tremendous growth.

[valhamos] 08/2/2016 17:07

Raiseworks

In the interests of greater clarity can you provide some support for this.

Edit. At 30 June 2015 there was also a £1.1m convertible with Platform Black. Anything else?

[raiseworks] 08/2/2016 17:04

nope-there are loans to other platforms as well

[droid] 08/2/2016 16:51

Val- I think everyone is aware of this except Raiseworks apparently.

[valhamos] 08/2/2016 16:25

I believe there is a loan to BMS and a loan to Sancus - I understand the rest to be loans through platforms.

[future financier] 08/2/2016 08:39

Also raiseworks is apparently show an absence of knowledge in relation to the order of priority when a business goes bust. If he had said 100% of equity was lost and 80% of loans that might have been credible (if somewhat extreme)- but he put it the other way round. My own guess is that up to 20% of loans could be dodgy, and probably 80% of equity - but the hope is that the 20% of equity remaining will end up being worth over 10x what was paid for it.

[bluemango] 08/2/2016 07:45

Confirmation of original terms.

The outcome of the strategic review to follow shortly, will lessen the opportunity for some of the more excessive scaremongering on here. Note still no decreased holdings notices from the major institutional shareholders such as Axa and Artemis. Last was actually a small increase by Artemis following the management changes and investment by Somerston.

Not saying all is rosy by any means, just calmly stating the facts as things stand.

[my retirement fund] 07/2/2016 15:16

All sounds like a pyramid selling con to me - who's at the bottom of the pyramid, oh yea GLIF equity holders!

[daveb12] 07/2/2016 09:08

raiseworks - are you sure they are all equity stakes (appreciate some are)? i know that they have invested funds into one particular platform and bought large amount of debt on it, probably on an average of approx 11% Gross. where do you get 90% of platforms failing? some struggling but also a lot doing well?

[ukinvestor220] 05/2/2016 12:38

must be reaching capitulation point soon ...

[bluemango] 04/2/2016 22:48

FF, I see your point but the question doesn't arise. We know some of the largest platforms such as Sancus are already cash generating (Sancus earning £2m profits annually), with most of the others expected to be this year. The question is by what amount in aggregate.