[Fred93]

In June, Stoneridge revealed a US mutual fund which invests in P2P loans.  Symbol LENDX.

They've announced that this fund "may" invest "more than 25%" of its funds in Lendingclub, Prosper, or FundingCircle individually.  Makes sense, as these are the three major players. 

So... This isn't so terribly exotic.  Its the kind of thing most of us here do.

Prospectus can be found at ...
http://stoneridgefunds.com/documents/LENDX_prospectus.pdf?v=009

It would appear that this fund is intended to be marketed to institutional customers.  There are giveaways like the $15M minimum investment, although it would appear that "clients of institutional customers" will have a lower unspecified limit.

But... These institutional customers would have to be stupid institutional customers, because the fees on this fund are laughable.



3.74% per year for what is most likely an automated index-like fund of loans from the three major originators.  How hard is that?  Do you think that is worth 3.74% per year of fees?  Gosh, I don't think so.

[PhilGD]

I don't understand why this fund has loan servicing fees. Isn't the servicing done by the platforms even for whole loan buyers?

[TravelingPennies]

from: PhilGD on September 06, 2016, 09:54:25 PM

[AnilG]

Doesn't seem like mutual fund, more like hedge fund. Unlisted  Closed end interval fund with restricted redemption.

[TravelingPennies]

from: AnilG on September 06, 2016, 11:49:23 PM

[TravelingPennies]

My bad. Prospectus made it sound like unlisted closed end interval fund. I didn't look in detail how they are going to report their holdings, hiding loans behind SPVs like UK funds or more transparent with loan profiles. Considering all such UK funds despite holding 2/3rd of US MPL loans are trading at discount, I will wait to see what happens to US funds.

from: Fred93 on September 07, 2016, 01:19:34 AM

[ryancar6]

So unless this is over my head, why would they choose to use this with such high fee's? Are there other options out there?

[rawraw]

Perhaps they justify the fee with the use of leverage and access to certain credit markets that aren't as easy to access (like the syndicated market, perhaps?)

[dompazz]

Just curious, how much would you be willing to pay in fees for an unlevered fund?  Assume it is a traded fund so you could get in and out at will?  What about a levered fund?

[TravelingPennies]

from: dompazz on September 14, 2016, 08:51:06 AM

[TravelingPennies]

from: rawraw on September 14, 2016, 06:51:56 PM

[TravelingPennies]

Quote"> from: dompazz on September 14, 2016, 08:26:55 PM

[TravelingPennies]

Think about a closed end muni-bond fund.  Those underlying bonds don't trade much.  You can get in and out of those at anytime during trading.  Yeah, they rarely trade at NAV.  So what?

If you are a small investor and you want exposure to muni's they are one of the only ways to get that exposure.  Why couldn't someone do that for p2p loans?

[Theta]

from: dompazz on September 15, 2016, 08:31:29 AM