Blogger Launches Peer-to-Peer Lending Mutual Fund
NEW YORK (MainStreet) Crowd-sourced lending is taking the next step for investors. Rather than buying into a deal here and another there across multiple peer-to-peer lending platforms, investors will soon be able to buy shares in a diversified package of consumer loans, either in the form of a separately managed account, or a mutual fund.
Services like Lending Club and Prosper offer personal loans to consumers that are funded by investors who browse loan requests, set their credit criteria and receive payments from borrowers. Prosper alone claims more than 2 million members with funded loans to date of nearly $700 million. Now, a blogger who champions such peer-to-peer operations is creating the first mutual fund comprised of socially-funded loans.
"It was around two years ago when I first received an email from a reader asking if I would help manage their investments on Lending Club and Prosper," Peter Renton writes on his blog Lend Academy. "Our P2P Fund will be diversified across both new and established P2P platforms from around the world. Our P2P Fund offering will be for accredited investors only with a minimum investment of $250,000. Our annual management fee is 1.5% and our target net return (after fees) is 10%."
The investment management firm also offers a separately managed account for both accredited and non-accredited investors. The service, currently in beta, features "conservative" and "balanced" portfolios of peer-to-peer loans with a minimum investment of $25,000 and an annual fee of 0.95% of assets.
"For too long individual investors have not had any professional money management options for their P2P lending investments," says Renton. "Lend Academy Investments solves that problem. For the first time individual investors have access to some of the leading experts in P2P lending to build and manage their P2P investment portfolios."
The investment firm is seeking to raise some $28 million in funding. Renton has teamed with Jason Jones, a former hedge-fund manager and Bo Brustkern, founder of Arcstone Partners, a securities valuation firm.
--Written by Hal M. Bundrick for MainStreet