Marketplace Lending Investments: A Primer for Investment Managers

Web-based platforms offering marketplace lending, or P2P lending, are proliferating as many traditional consumer and small business lenders struggle with increasing regulatory compliance costs and operational inefficiencies. Institutional investors in the United States, Europe and Asia appear to have substantial interest in investing in marketplace loans because of the favorable risk-return profile of such investments relative to other comparable loan products. In this article, partner Thomas R. Weinberger and former SRZ lawyer Joseph Suh highlight important considerations for investment managers who may be interested in managing a private investment fund or a securitization issuer that invests in marketplace loans.