Fri, Feb 24, 2017
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. People - Kuwait wealth fund head Al Saad said to step down after 14 years[more]

    From Bloomberg.com: Kuwait Investment Authority is set to name Farouk Bastaki as managing director, replacing Bader Al Saad who ran the world's fifth-largest sovereign wealth fund for 14 years, a person familiar with the matter said. The KIA, as the fund is known, is finalizing the appointment, said

  2. Investing - Hedge funds loading up on this dividend stock, The biggest hedge funds have been piling into bank stocks[more]

    Hedge funds loading up on this dividend stock From Incomeinvestors.com: Hedge funds are backing up the truck on Cameco Corp stock. Billionaire Jim Simons owns 389,000 shares. Other Wall Street titans - including Ray Dalio, Ken Griffin, and Chuck Royce - have been quietly building positio

  3. Legal - Fannie, Freddie shares dive after U.S. appeals court ruling[more]

    From Reuters.com: Shares of Fannie Mae and Freddie Mac tumbled more than 30 percent on Tuesday after a U.S. appeals court shut down efforts by hedge funds and other investors to pursue numerous legal claims accusing the U.S. government of seizing their profits following taxpayer bailouts. By a

  4. Institutional investors plan to raise allocations to alternative assets in 2017[more]

    Komfie Manalo, Opalesque Asia: A survey by Context Summits Miami showed that nearly 72% of institutional investors and family offices plan to raise their allocations to alternative asset managers this year, suggesting continued strong demand for the industry. "As many large, brand name f

  5. Comment - Mortgages, mergers and hedge fund fees, Fairholme's Berkowitz responds to court ruling against hedge fund suits of Fannie Mae[more]

    Mortgages, mergers and hedge fund fees From Bloomberg.com: Yesterday the U.S. Court of Appeals for the D.C. Circuit handed down an odd decision in a lawsuit over the government's nationalization of Fannie Mae and Freddie Mac. The key issue is what's called the "Third Amendment," the 2012