Tue, Aug 30, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Peer-to-peer lending platform creates opportunity in consumer term loans

Monday, February 17, 2014

Precy Dumlao, Opalesque Asia:

Peer-to-Peer (P2P) lending platforms have created an opportunity to invest in consumer term loans, an old and well-understood asset class, said Howard Freedland, principal at Emerald Asset Management.

In its latest white paper, Emerald said investing in P2P originated loans is becoming an institutionally accepted asset class which seeks to deliver attractive yields with an extremely short duration in a yield starved investment environment and fairly predictable returns net of expected defaults.

"An investor can now construct a diversified portfolio of securities representing consumer loans with potentially attractive yield, duration, and credit characteristics," Freedland said. He added, "A confluence of regulatory and technological changes impacting traditional bank lenders have created an opportunity for investors to directly participate in this asset class. A combination of technology and financial innovation has made consumer term loans available to a much broader segment of the investor population in the form of investable securities called 'Borrower Dependent Notes’ which represent fractional interests in individual consumer term loans.

According to the paper, loaning money to strangers is typically a risky venture, but the structural size and scope of P2P consumer lending seeks to mitigate this risk by taking advantage of the "Law of Large Numbers."

Instead of mak......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new