A maelstrom of headlines surrounding the resignation of Lending Club CEO Renaud Laplanche dominated this week’s headlines.
Other news included the US Treasury
report, “Opportunities and Challenges in Online Marketplace Lending” and Jamie Dimon’s
comments on the virtues and funding challenges for marketplace lending.
Investor Reactions
Over the past week, we have fielded 50+ conversations with institutional investors and platforms. Views tend to split across investor type. We attempt to summarize these disparate views in the table below.
Going Slow to Move Fast
Institutional participation in marketplace lending is still a relatively recent phenomenon.
The dry nuts and bolts, plumbing, and data projects that may have historically taken a backseat to new product initiatives are coming to the fore.
Over the next 12 months, we see platforms deemphasizing growth and instead competing to build investor trust via transparency, independence, and enhanced disclosure.
Looking past the negative headlines, the core investment thesis for purchasing marketplace lending loans remain intact. Online lenders are expanding credit to historically underserved segments and generating attractive loss-adjusted returns for investors in the process.
Conferences:
- CEO, Ram Ahluwalia, will join a panel discussion entitled, “Alternative Lending Securitization and Similar Capital Sources,” on June 9th in New York—RSVP here.
- PeerIQ will be in Miami for the ABS East Conference in Miami September 16-18.
Industry Update:
- Marketplace Lending: Bruised, Not Buried (American Banker, 5/10/16) The ability to purchase fractionalized securitized loans with the granularity and transparency that marketplace lending platforms offer is a significant differentiator that, over time, will ensure the growth of the industry.
PeerIQ Mentions:
- Membership Revoked (Economist, 5/14/16) Future investors will expect more in the way of disclosure, asset reviews, and independent evaluations.
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