Sat, Jan 31, 2015
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. Opalesque Exclusive: Ex-Citi trader launches 'sleep-at-night’ long/short equity fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: After working at Citi's proprietary trading desk, managing a large portfolio between 2008 and 2011, Joel S. Salomon founded SalaurMor Management in New Yor

  2. Investing - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  3. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  4. Update: Prosecutors seek 12 years for hedge fund manager Francisco Illarramendi[more]

    Komfie Manalo, Opalesque Asia: Federal prosecutors have asked the court to sentence convicted hedge fund manager Francisco Illarramendi to 12 years imprisonment for running an elaborate Ponzi scheme that bilked investors hundreds of millions in dollars, including a Venezuelan pension fund, report

  5. Institutions - Ontario pension fund leader calls all asset classes ‘expensive’, Taiwan's BLF plans $2bn in alternative mandates[more]

    Ontario pension fund leader calls all asset classes ‘expensive’ From WSJ.com: The head of one of the world’s largest pension funds said that across asset classes, “everything is expensive.” Ron Mock, who leads Canada’s $141 billion Ontario Teachers’ Pension Plan, said that the plan would