P2P Global Investments' shares fell 20.7% on the London Stock Exchange in 2016; the fund's portfolio manager Simon Champ provides some insight on the fund's performance; the underlying assets reported a lower than expected 4.1% return due to increased delinquencies from loans at the midpoint of their duration; hedging costs have also been a factor with approximately 60% of US loans in the portfolio; as the investable market expands the fund is likely to increase its investment in European loans to help diversify away from currency risks. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
Every day the Fintech Nexus news team scours the globe for the most important stories of the day to include in our daily newsletter.
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After opening a search for a digital lending solution, the American Bankers Association has chosen Akouba; Lend Academy provides details in their article; Akouba offers banks a digital lending software solution for executing small business loans; it primarily works with community and regional banks; the ABA endorsement is a huge win for Akouba and will substantially add to its sales pipeline; the firm has 11 employees and has mainly been working with community banks reporting $500 million to $25 billion in assets; in addition to facilitating new business for Akouba, the ABA endorsement is also designed to help educate the market on advanced solutions for small business online lending; the ABA will be releasing a report on Akouba and the company will be holding a webinar on March 8 to discuss digitizing the small business lending process. Source
Chen Wei accumulated losses of over 489,400 yuan ($71,154) from lending platform Jiedaibao, operated by Renrenxing; the Chinese platform facilitated transactions between borrowers and lenders, allowing lenders to set their own interest rates and manage their own credit lending strategies; Renrenxing managed oversight of the platform including responsibility for collections; Chen's strategy was to borrow from platform lenders at low rates and lend to borrowers at higher rates, benefiting from the difference; Chen initially reported success but then increased borrower defaults led to losses of over 489,400 yuan ($71,154); Chen was subpoenaed by Jiedaibao for the funds he owed; Jiedaibao later dropped the case but Chen is now suing Renrenxing for the money owed from borrowers; more than 30 users have now filed court cases against Renrenxing for payments totaling over 22.5 million yuan ($3.27 million); new regulations have now been instituted to stop intermediaries from offering protection against losses. Source
The LendIt Insurtech Forum is today at 4 PM EST; the Forum will help to introduce the LendIt audience to one of the most innovative companies in property and casualty insurance, and a leading insurance association focused on this innovation trend; Lemonade CEO Daniel Schreiber and Adam Kerns of the American Insurance Association will be interviewed by Thalia Smith of Deloitte about innovation currently taking place and how these new companies are affecting the traditional players in the insurance market; register here. Source
UK financial services conglomerate Old Mutual is evaluating its ownership in Old Mutual Asset Management (OMAM) and has decreased its ownership share in the company to 51%; HNA and Advent now appear to be the most interested buyers of the asset management business; while OMAM has discussed a buyout with the potential bidders it appears hesitant to proceed with a sale due to relationships with OMAM's affiliated investment boutiques; it is also nearing a minority stake which would change deal discussions; overall the UK's Old Mutual appears to be headed toward a four way selloff of its businesses including: OMAM, a wealth management company in the UK, an insurance business in South Africa and a stake in Nedbank. Source
The Securities Exchange Board of India (SEBI) has announced the formation of an advisory committee focused on fintech; development of the advisory committee follows the demonetization of the country's currency and lack of regulation instituted by federal government officials in regards to the P2P lending industry and fintech in general; the advisory committee will include representatives from across the entire fintech sector; a key initiative for the committee will be to mobilize household savings from India's consumers through new risk capital and debt investments. Source
In an article from Quartz several stories are outlined sharing how SoFi has helped borrowers get re-employed or negotiate for higher salaries; in one example Joanna Mathews was laid off and called SoFi to get forbearance on her credit consolidation loan which was approved; Joanna was subsequently assigned a counselor to help in the process to find employment, speaking weekly to her counselor; Joanna attended webinars on writing resumes and interviewing, eventually landing 15 interviews; after a three month search Joanna was employed again; in another story a borrower reached out to a SoFi coach for tips on salary negotiation, bargaining for an additional $6,000 per year using tips from SoFi. Source
Money360-affiliate M360 Advisors has registered with the South Korea Financial Supervisory Service; the registration allows institutional investors from South Korea to invest in the firm's real estate fund; the fund invests in secured US commercial real estate properties through bridge loans and offers global investors a high yield fixed income alternative; the fund has already received $65 million from a South Korean institutional investor and is planning for investment of $250 million in the first half of 2017; the fund is managed to provide international tax efficient investing along with high yield fixed income returns and has a number of other foreign investors including investors in China, Singapore, South Africa, Europe, Canada, the Netherlands and Kuwait. Source
Millennials now account for the largest majority of the US population and research predicts they will grow to 81 million in 2036; a majority of millennials have been credit averse with minimal credit history which has caused credit providers to target them in slightly different ways; in a white paper from LexisNexis the company provides a profile of millennials for credit providers. Sponsored Blog Post
Ram Ahluwalia and PeerIQ have become a significant part of the ecosystem for marketplace lending providing loan data analytics and securitization research; Ahluwalia recently talked with Crowdfund Insider about his perspective on the market; cited institutional support as a positively improving factor for lenders with securitization issuance increasing 60% in 2016; says loan originations in 2016 still reported substantial growth despite industry challenges and notes PeerIQ is working with industry participants to help develop new products for retail investors; Ahluwalia also discusses the industry's regulatory concerns and competition from banks as well as the global market outlook for the industry. Source