RIVERNORTH Capital Management today said it has launched a fund dedicated to peer-to-peer lending, in a sign that US investor sentiment is improving towards the sector after the Lending Club scandal.
The Chicago-based investment firm’s new fund, called RiverNorth Marketplace Lending Corporation, will be listed on the Nasdaq and will invest in a range of loans including unsecured consumer, small business and specialty finance.
“We are pleased to add RiverNorth Marketplace Lending Corporation to our portfolio of opportunistic investment offerings,” said Brian Schmucker, chief executive of RiverNorth.
“RiverNorth is among the first to offer retail investors this tremendous opportunity, that of providing diversified and efficient access to the peer-to-peer lending space.”
The investment management firm, which manages assets of around $3.4bn (£2.6bn), said it has already negotiated relationships with “quality online lending partners”. The fund’s investment objective is to seek a high level of current income, the company said.
The US peer-to-peer lending market has grown rapidly in recent years and has attracted far more institutional investment than the P2P market here in the UK.
However, the corporate governance scandal surrounding Lending Club earlier in the year, which resulted in the high-profile departure of its founder and chief executive Renaud Laplanche, raised concerns about the quality of due diligence in the sector. The debacle caused the NYSE-listed platform’s share price to plummet and that of P2P funds that were invested in the firm.