Author Topic: Is LC no longer interested in retail investors?  (Read 3737 times)

mschoenf

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Re: Is LC no longer interested in retail investors?
« Reply #15 on: November 15, 2018, 09:34:37 PM »
On a somewhat related note, last week, I got a Prosper offer via email for a 1% bonus (Like LC used to do sometimes) for adding new money and investing in notes over there ($2,500 min) so interesting that they might be trying to spur some retail interest on their platform.  Unlike what we're seeing with LC.

investny

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Re: Is LC no longer interested in retail investors?
« Reply #16 on: November 28, 2018, 01:26:10 PM »

panther02912

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Re: Is LC no longer interested in retail investors?
« Reply #17 on: December 19, 2018, 02:56:48 PM »
I emailed LC investing about low loan inventory in mid-November and got back a generic email about supply and demand.  Then, this week I got a phone call from another investor services rep to discuss loan supply. 

This rep told me that LC hasn't given up on retail investors, and that our feedback is used to make allocation decisions (as recently as yesterday in some sort of loan inventory meeting).  Inventory might increase from <100 loans like today to 100-200, but not to 500 loans like prior years.  I might want to start pulling back from my account, if I can't find enough loans to invest my cash.

On reflection: someone is listening at LC, but there's no reason to expect any major change.  Talking to them does help advocate for our interests.

investny

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Re: Is LC no longer interested in retail investors?
« Reply #18 on: January 01, 2019, 10:26:15 PM »
December retail volume was as low as November's.
Doubt anything will improve in 2019

https://www.peercube.com/histperf/available_loans/lc

bkcarolina

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Re: Is LC no longer interested in retail investors?
« Reply #19 on: February 10, 2019, 05:56:47 AM »
I just emailed this:

Hello

I've been a lending club individual investor for quite a few years now (since 2011) and even though my account is relatively small, worth about $22,000, I have appreciated using your platform and done fairly well, with over 8% ROI consistently.

About a year ago I wound down putting new cash into my account because I realized that you began shutting out retail investors in a major way.

I know well your routine platitudes about how the loans available depend on many factors and go up and down etc etc etc.  But let me state that I'm really sorry to see what was a good company providing a really useful service to average investors and borrowers in an equitable way sell out to the big finance boys. Really disappointing.

I continue to manually put my returns back into new loans, but expect I'll quit doing that someday soon as I'm finding it almost impossible, with your pitiful inventory, to find loans I want to invest in.

investny

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Re: Is LC no longer interested in retail investors?
« Reply #20 on: March 18, 2019, 03:03:19 AM »
Looks like the retail loan volume so far this year is just as low as Q4 of last year.
http://prntscr.com/mzbwx3

From https://www.peercube.com/histperf/available_loans/lc

AnilG

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Re: Is LC no longer interested in retail investors?
« Reply #21 on: March 18, 2019, 04:04:18 AM »
Look at the chart below the one, you posted, on PeerCube, you will know the reason. There is not enough demand, since Oct of last year, LC has been self-funding the shortfall in loan funding.

Looks like the retail loan volume so far this year is just as low as Q4 of last year.
http://prntscr.com/mzbwx3

From https://www.peercube.com/histperf/available_loans/lc
---
Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

.Ryan.

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Re: Is LC no longer interested in retail investors?
« Reply #22 on: March 18, 2019, 10:18:57 AM »
Anil, what do you read into this? Is the capability for lender money not able to keep up with increased loan requests? Or is the lender $ pool decreasing in size? Any insight into retail vs. institutional lending trends?

Thanks Anil. Always appreciate your input.

investny

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Re: Is LC no longer interested in retail investors?
« Reply #23 on: March 18, 2019, 02:56:30 PM »
Anil,

Are your referring to this?
http://prntscr.com/mzmraa

August was fine. September was 1 off month either because LC did something or people decided to put money in stock market while it was at all time high.

Until October 1 i was able to fully reinvest all the interest and repayments that i was getting. I did not change my filters as i do not want to take additional risk. Since October i can barely pick up 2-3 notes a day. Right now i keep accumulating cash balance even though amount invested is smaller than before. Cash balance got to a point where im planning to move it off LC.

Fred93

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Re: Is LC no longer interested in retail investors?
« Reply #24 on: March 18, 2019, 03:38:50 PM »
Look at the chart below the one, you posted, on PeerCube, you will know the reason. There is not enough demand, since Oct of last year, LC has been self-funding the shortfall in loan funding.

I don't accept this logic.  Volume is not a measure of "demand".  Both supply and demand affect volume.

LC is steering volume toward securitizations. 

jd

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Re: Is LC no longer interested in retail investors?
« Reply #25 on: March 18, 2019, 06:57:34 PM »
Quote
I don't accept this logic.  Volume is not a measure of "demand".  Both supply and demand affect volume.

LC is steering volume toward securitizations.

Good evening Fred,

I'm always impressed with your observations. Do you think your view of LC moving toward securitizations will be good, bad, or neutral toward those of us investing in notes.

Thanks

AnilG

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Re: Is LC no longer interested in retail investors?
« Reply #26 on: March 19, 2019, 01:57:29 AM »
My assessment is that a lot of loan listings were not being "fully" funded in institutional and retail platform that require SEC filing. Loans issued and transferred to banks and securitization are not part of these SEC filings. Each loan listing can cost as much as $300 in lead generation payments to likes of CreditKarma. LC doesn't receive origination fees, and also loses lead generation fee, unless loans are issued so LC had to step up and fill the unfunded remaining amount.The last big self-funding of about $3M happened in mid-Sept at almost end of quarter most probably to fund the "unfunded" portion and issue loans before the end of quarter. Since then, LC seems to have reduced the volume of new loan listings (downward trajectory of both volume and total amount curve) on platform to reduce the need for self-funding remaining "unfunded" portion as well as reducing lead generation cost.

My observation is loans are staying longer on the platform to be fully funded. One example was the borrower who came on LA forum and Scott did check on his loan time to time on funding status. It took quite a while for that loan to be fully funded. And we don't know how much of that was funded by LC itself. Borrowers are not going to wait forever for loan to be issued so LC has to sooner or later step in and fund the remaining amount. More loans are partially funded, more LC need to self-fund remaining unfunded portion and issue loans.

If you are lending fixed amount per loan, you will be impacted by fewer loans being listed on platform as there may not be enough loans for you to deploy your cash. Consider employing multiple strategies or increasing amount per loan of course your risk per loan increases.

Again, this is all conjecture and speculation on my part. I don't have any special knowledge of what is going on inside LC.

Anil,

Are your referring to this?
http://prntscr.com/mzmraa

August was fine. September was 1 off month either because LC did something or people decided to put money in stock market while it was at all time high.

Until October 1 i was able to fully reinvest all the interest and repayments that i was getting. I did not change my filters as i do not want to take additional risk. Since October i can barely pick up 2-3 notes a day. Right now i keep accumulating cash balance even though amount invested is smaller than before. Cash balance got to a point where im planning to move it off LC.
---
Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

Fred93

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Re: Is LC no longer interested in retail investors?
« Reply #27 on: March 19, 2019, 02:54:40 AM »
Do you think your view of LC moving toward securitizations will be good, bad, or neutral toward those of us investing in notes.

Definitely negative.  Means LC has less interest in us and our needs. 

AnilG

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Re: Is LC no longer interested in retail investors?
« Reply #28 on: March 19, 2019, 03:53:32 AM »
You didn't elaborate and explain your logic so I can't comment on it.

My logic is simple, if there was enough demand on platform, LC wouldn't need to self-fund the remaining portions of the loans. The loans will be funded by lenders quickly and disappear from platform without need for LC to contribute their funds to complete the loan funding and issue the loans. It all points to not enough demand from lenders on platform. Listing more loans on platform (increasing supply) will only increase the "unfunded" portion that LC need to either fund itself or not issue loans and eat the lead generation cost.

The loans for banks and securitization never show up on the platform. My understanding is that banks commit in advance the amount they will fund in a quarter/month and loan quality they want. LC then goes out and finds enough quantity of such loans for the banks. Most probably, securitization has similar "advance" information exchange with institutions where LC has the indication/knows the loan quality and maximum amount it can securitize then goes out and find such loans.

Look at the chart below the one, you posted, on PeerCube, you will know the reason. There is not enough demand, since Oct of last year, LC has been self-funding the shortfall in loan funding.

I don't accept this logic.  Volume is not a measure of "demand".  Both supply and demand affect volume.

LC is steering volume toward securitizations.
---
Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

panther02912

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Re: Is LC no longer interested in retail investors?
« Reply #29 on: March 24, 2019, 02:20:16 PM »
Fractional loan inventory has become terrible so I wanted to visualize the trend.  There is a gradual taper in fractional loan listing count (and percentage-of-total) through the end of 2018.  For example in December 2018, 4285 out of 40131 loans (11%) were fractional. 

I anecdotally observe that essentially zero good loans linger on the market recently.  Either bots are grabbing all of the best fractional loans more quickly or the fractional loan supply is even worse in 2019.  I'll recheck when the 2019Q1 dataset posts.
« Last Edit: March 24, 2019, 02:21:55 PM by panther02912 »