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P2P P2p Global Investments Plc

0.00 (0.00%)
Last Updated: 01:00:00
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P2p Global Investments Investors - P2P

P2p Global Investments Investors - P2P

Share Name Share Symbol Market Stock Type
P2p Global Investments Plc P2P London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.00 0.00% 826.00 01:00:00
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Posted at 10/9/2019 07:02 by spangle93
From a Mister Invastor piece

One other peer-to-peer fund to watch is P2P Global Investments (LON:P2P). Woodford sold his full holding in the £620m vehicle for £80m in the six months to the end of June, but it looks like he still has a significant stake in the Honeycomb Investment Trust (LON:HONY), which is run by the same management company, Pollen Street Capital.

Pollen Street has worked hard to turn around the portfolio and performance of P2P since taking over its former manager, yet the fund still trades on a 13% discount, whereas Honeycomb’s superior performance has left it on an eight percent premium.

There had been speculation that the two could merge, which would probably have resulted in a positive re-rating of the P2P shares, but Woodford’s large holding in Honeycomb’s rarely traded stock makes this difficult unless there is some kind of deal. Adventurous investors might want to take a punt on P2P ahead of a possible merger or they could short HONY in anticipation of Woodford having to dump his 18% stake into a thin market
Posted at 04/5/2018 10:01 by davebowler
P2P Global Investments (Mkt Cap £622m)

Low cost of debt on new securitisation


Further to last week's announcement, P2P Global Investments has completed the securitisation of a portfolio of UK SME loans originated by Funding Circle.

The senior tranche represented 62% of the overall structure and was awarded a Aa3 rating by Moody's. The spread on the senior tranche was 75bps. Investors in the securitisation included the European Investment Fund (part of the European Investment Bank) and KfW, the German development bank.

The transaction is backed by 4,007 loans with a total remaining balance of £206.6m (original balance £255.6m). The weighted average interest rate on the portfolio is 10.0% and the average remaining balance is £52k. The weighted average seasoning of the loans is 8.6 months and the average remaining term is 44.7 months.

Liberum view

The weighted average spread on the overall securitisation has not been revealed yet but it should help to lower P2PGI's cost of funding (1.9% average spread at 31 December 2017). In addition, it broadens the company's sources of funding. The shares currently trade on a -17.3% discount to NAV.

Specialist Finance
Posted at 27/4/2018 15:59 by aroon001
Hi Yieldsearch thanks for that background. I'm still not sure I follow how it works. What you are describing is say P2P buying £10m of 10% yielding loans, and then raising finance (borrowing money) @ 4% from somewhere to fund £9.5m of the assets. So leveraging themselves up 20x.

But a securitisation is where you package and sell the loans on to other investors, who in return get the income from the 10% yielding assets? So who will actually own the £10m of loans in this case (and were they already on p2p books), who is borrowing the funds at libor + x and from where, what does it mean when it says P2P will retain 5% of the structure?
Posted at 27/4/2018 12:38 by aroon001
Daft question, could somebody explain how these securitisations work? if P2P is packaging loans (it already owns?) and sells them off to investors, how does this benefit P2P? What does it have to do with diversifying P2P's source of funding?
Posted at 27/10/2017 20:21 by thompson_alan
P2P Global Investments (P2P)

Numis Securities believes there could be a pick-up in P2P Global Investments’ sorry share price. The largest of the listed funds in the direct lending sub-sector, P2P lost investors’ confidence when currency hedging costs and rising delinquencies on its high US consumer exposure meant it failed to hit its annual return target of 6-8%.

Earlier this year, its manager merged with Pollen Capital, the manager of its more successful and UK-focused rival Honeycomb (HONY).

With the discount on the shares having widened to 22% - giving it a Z-score of 1.1% - and a strategy update expected early next month, Numis analyst Sam Murphy is cautiously optimistic, writing this week that:

‘We now see only modest downside, with the potential for the discount to narrow if returns start to pick-up or if the November strategy update provides an improved outlook. The fund is paying quarterly dividends at a rate of 12p, equivalent to 48p pa and a 6.1% yield on the current share price. We expect that over time P2P’s portfolio will look a lot more like Honeycomb IT, which is also managed by Pollen Street.

‘This raises potential for a merger in future, in our view, and it is notable that Invesco Asset Management is the largest shareholder in both funds,’ he said.
Posted at 26/10/2017 00:29 by aroon001
So 0.14% return on the month, which is like 1.5% return per annum without buybacks.
Comparable to a regular high interest savings account, but exposed to more credit risk and leverage, and paying a performance fee on top.

They really need to wind this down and return funds to investors. Ideally before the next recession.
Posted at 25/10/2017 14:15 by davebowler

NAV per share at 30 September was 1002.2p which represents an increase of 0.19% in the month of which share buybacks added 0.05%. NAV return in Q3 was 0.77% and in 2017 to date is 3.1%.

Exposure to US consumer loans has reduced to 34% of NAV (June 2017: 39%). Hurricanes in the quarter impacted the US portfolio by increasing delinquencies in affected states such as Texas and Florida.

The corporate debt facility has increased from £150m to £200m as the company is seeking to move away from US Dollar financing. P2P GI is also seeking to arrange a securitisation of Zopa loans which should help to reduce the cost of funding. The transaction is backed by 31,153 Zopa loans with a total outstanding balance of £209m, which represents the majority of the company's existing UK consumer loan exposure (20% of NAV at 30 September 2017)

An unchanged dividend of 12p has been declared for Q3. 5.7p of this was covered by income and 6.3p is from the special distributable reserve of which 2.1p relates to share buybacks.

Liberum view
P2PGI's returns remain subdued (12-month NAV return of 3.7%) which has led to the discount widening to -21% in recent months. In terms of credit performance, the 6-month rolling annualised impairment rate has declined slightly in the quarter but remains high at c.4.5%. The focus will now shift to the strategy update which is due in early November as investors seek clarity on how the portfolio will change over the next 12-18 months.
Posted at 18/10/2017 23:36 by aroon001
So P2P global is packaging up a group of loans that us shareholders are currently receiving income from, and sells them on to other investors (whilst retaining a small portion). How does that benefit current shareholders as surely P2P now has to find other assets to invest in, and what does it mean reduces P2P costs of funding?
Posted at 28/8/2017 16:08 by argoal
Well, it looks like everyone, including me, sold out here while they had the chance at around 900p when the buy backs were buoying up the price.

The price has now drifted back to below 850 as the buy backs start losing their influence and the monthly Nav increase remains anaemic.

At what price do these become interesting again? I'm thinking at around 825 in the absence of any further news. Below 800 might prompt something decisive like a wind down and return of value to investors.

On the other hand, an improvement in returns would probably see the drift downwards reversed.
Posted at 07/12/2016 14:22 by aroon001
1) I don't think anyone of any importance follows this blog (however great that would be!
2) I don't think investors are exiting with great haste - to me the fair value of this stock given it shud be about 6-7% yield is probably in the 600-700 pence area. If anything buyers are being overly optimistic at these levels if one continues to expect 35-40 pence dividends a year.
3) The discount to NAV is a bit of a distraction. Even if the assets were bought at 100 yielding 10% ish, (and could be sold for that price approx), if you are only returning 3% to your investors, the share price should halve regardless of nav. 30% discount may sound ridiculous, but I cant see why it wudnt go to 40% or 50% if the fund manager is doing such a poor job.
4) reasons to be optimistic due to a tweak in strategy? not really, stating that they will increase proportion of gbp assets not sure why that would change anything. USD assets infact yield more so I cant see what this would achieve.
5) Rising bonds yields - seems like the duration of the portfolio is 2 years according to the factsheet. Since inception I don't think bond yields have moved so much in 2 year maturities, if anything they have gone lower so this should have been an overall plus.
6) open ended may make more sense for this given how relatively new P2P securities are, but with such poor performance, rather than a large discount, there would be queues of investors trying to exit.

Ultimately for me the bottom line is that the fact sheet states the underlying loans have an 11% coupon. Leveraged up this is about a 20% return. If the final investor only gets 3% there is a serious issue and the resultant discount is just a manifestation of this, rather than something to be that surprised about in terms of magnitude. Worryingly none of us really know why the returns are so low. Reasons given have been fx hedging and the securitisation of the Zopa portfolio but the given the low cash balances now, and the one off nature of the latter, I'm not sure why returns are still low.

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