Victory Park Capital (VPC) Investments says it is shifting investments from peer-to-peer loans to balance sheet investments after losses in October triggered significant writedowns and caused a revenue return of -1.25%; in October the return was primarily caused by a substantial capital loss of -203 basis points from "certain marketplace loans" which it did not disclose and also from losses in a securitized portfolio of Avant loans; according to Cormac Leech, "the marketplace lending portfolio is not quite seasoned, while the balance sheet side of investments is doing really well"; this performance has caused the change in focus to balance sheet investments. Source
Chinese startup Niu Jiao Suo is connecting Chinese investors with foreign mutual funds; investors can currently access funds offered by Blackrock, Vanguard, JP Morgan and Goldman Sachs; investors are limited by $50,000 per year but can start with as little as $400; interestingly Niu Jiao Suo is not managing its users money and focuses on ensuring users don't exceed the $50,000 limit; according to Crowdfund Insider: "After funds are deposited into a user's account, the money is sent directly to a custodial account managed by DBS Bank. Niu Jiao Suo's primary role is conducting due diligence on the users to make sure they have a clean background and are not US citizens." Source
ApplePie Capital has received endorsement from Fifth Third Bancorp as more large banks take an interest in marketplace lenders; Fifth Third Bancorp participated in a funding round that resulted in a $16.5 million investment for ApplePie Capital; Lend Academy provides details in their article; the funding will help ApplePie Capital continue to improve its market positioning; it currently provides loans for franchisees affiliated with its 40 franchise brand partnerships. Source
In their recently completed review, the Financial Conduct Authority (FCA) was particularly worried about some platforms using customer money to buy loans from rival platforms; FCA CEO Andrew Bailey explained that platforms don't have enough loans to present so in turn they use investor money to buy up loans from a rival platform; this is worrisome as investors are not being told the correct risks; Mr. Bailey did not disclose any platforms by name and said the issue was not widespread but worth keeping an eye on. Source
Bob Kerrey highlights positive factors resulting from an OCC fintech charter in an American Banker opinion editorial; notes the regulatory perspective of both democrats and republicans; says the charter will lower prices and result in better products while also promoting competition; Kerrey also suggests a continuation of state and attorney general enforcement of civil and criminal laws against fraud and unfair and deceptive practices which would ensure the charter does not allow businesses to escape set standards. Source
China-based Qudian said on Monday it has filed with the SEC to raise up to $750 million in an initial public offering, planning to to list on the NYSE under the symbol QD; Qudian plans to use net proceeds for strategic acquisitions and marketing and borrower engagement; Qulian provides small loans and installment-based financing for e-commerce in China. Source
Understanding how asset allocators view the space is something a lot of online lenders and fintech companies want to grasp; the panel at LendIt USA 2017 with asset allocators discussed their thoughts on fintech generally and the alternative yield market; traditional fixed income has become less attractive and so more investors are looking at where they can get greater yield for their investment; there is a thought that normalization of interest rate policy globally will ultimately resolve itself in an unpleasant way; alternative yield is a new asset class so selling to the big institutions has been a challenge; it really comes down to finding the right group within the institution and selling it as the right type of asset; knowing your market appetite is also key, such as in Europe where their are negative yields and public markets have been overbought by central banks; vigilance of recent lessons learned and beginning to fully understand this new asset class are two key takeaways as asset allocators begin taking a closer look toward this market. Source
PeerIQ and Freedom Financial Network have signed an agreement that will allow new data access for Freedom Financial Asset Management and its clients; Freedom Financial Asset Management is a marketplace lending platform offering consumer loans; the data access will include PeerIQ's full suite of tools which will also be available to the platform's institutional investors; Freedom Financial Asset Management will also utilize PeerIQ's fair valuation services which launched last year. Source
Alibaba's affiliate Ant Financial has reported an investment in payment provider Mynt which has its business focus in the Philippines; Mynt currently has three million registered customers and reports one billion pesos ($19.9 million) worth of transactions per week; it provides services for consumers, merchants, and organizations primarily through its GCash and Fuse Lending businesses; GCash serves as its micropayment service provider and Fuse Lending offers online personal and business loans. Source