US PRESIDENT Donald Trump (pictured) has promoted a favourable environment for online lending, according to Victory Park Capital Specialty Lending Investments (VPC).
The alternative finance-focused investment fund, which has 74 per cent of its portfolio allocated to US companies, said in its annual report that “the Trump administration has continued to promote a favourable regulatory environment for fintech investment and online lending”.
The London-quoted firm noted the US Treasury’s report on fintech, which was published during the year, and the US Office of the Comptroller of the Currency beginning to accept applications for its national fintech charter.
The Treasury’s report contained 80 recommendations for the sector, centred around four main policy goals: embrace the efficient and responsible use of consumer financial data and competitive technologies; streamline the regulatory environment to foster innovation and avoid fragmentation; modernise regulations for an array of financial products and activities; and facilitate “regulatory sandboxes” to promote innovation.
“With the House of Representatives moving to Democratic control, and a slew of candidates already entering the 2020 presidential race, the more likely outcome is that very little happens legislatively for the next two years,” said VPC.
“Overall, the deregulatory position of the Trump administration has been a marginal positive for the company’s portfolio, but we are not opposed to intelligent and thoughtful regulation in consumer markets.
“Overall, the investment manager and the company feel developments in the US continue to be in line with favourable goal of working to expand access to credit for all consumers and small businesses, which is a positive development for the fintech ecosystem and for the overall health of the US economy.”
However, VPC noted signs of “economic softening” in the US, with a slowdown in housing investment in the country.
“At the portfolio company level, the investment manager has seen continued strong credit performance and does not see signs of any broad-based weakening in the consumer or small business market,” it added.
“The investment manager has a robust pipeline of unfunded commitments in its current portfolio which allows both the investment manager and the company to take a cautious approach to new deals at this stage.”
VPC said that it feels its portfolio is “fairly insulated to the impact of Brexit” as just nine per cent of its portfolio is in UK investments, with most of the risk relating to the company’s hedging programme.
“With the closing of the company’s credit facility from CapitalSource, the company now has a sufficient amount of revolver facility available such that the company can sustain a further significant drop in the pound without affecting the company’s hedges,” it added.
VPC separately confirmed Kevin Ingram’s and Clive Peggram’s permanent appointments as chairman of the company and chairman of the audit and valuation committee respectively.
Peggram and Ingram moved into their respective roles on an interim basis in December, after former chairman Andrew Adcock stepped down and subsequently passed away.
The alternative finance-focused investment fund also named Mark Katzenellenbogen as a new non-executive director, effective from 1 May.