CreditEase Fintech Investment Fund (CEFIF) announced three investments in new fintech companies at LendIt USA 2017; the investments were a series C round in Trumid, an electronic trading platform for the bond market, series B round in WeConvene, an online corporate access management ERP provider for capital markets, and a seed round in WorldCover, an innovative peer-to-peer insurance network; Anju Patwardhan, senior partner of CEFIF, said: "We believe the Chinese fintech market will continue to grow in 2017 and beyond, as many three to five year-old companies have grown into large-scale operations. We expect many of these to mature into high-quality, mid-to-late stage companies." Source
Last Friday Peter and I had the honor of joining the CreditEase team on the NYSE floor to ring the...
Dalian Wanda Group is a Chinese multinational conglomerate and the world's largest private property developer and owner; it is rumored that the Wanda Group may be interested in acquiring European bank ownership to build out its financial division; current financial businesses include an investment company and Aeon Life Insurance; speculators report the Wanda Group would face challenges acquiring a European bank due to regulatory constraints around banking industry involvement. Source
Chinese online consumer lender Yirendai has announced progression toward securitization of a portfolio of consumer loans; the firm has transferred an existing trust fund of RMB300 million ($43.6 million) used to fund loans on its platform to Bohai International Trust Co., Ltd., and the firm has completed the issuance of asset-backed securities in the amount of RMB300 million through private placements. Source
Chinese online lender Dianrong has reported plans for a merger with Quark Finance; the merger will create a broadened set of credit offerings; Dianrong is known as the "Lending Club of China" and Quark Finance offers a range of financial services for consumers and small business owners. Source
The CreditEase Wealth Management Offshore Private Credit Fund (OPCF) has announced new investments in OnDeck and LendingHome; in 2015 the fund raised $80 million from Chinese clients, including high net worth and mass affluent investors, which it expects to be fully invested by March 2017; a $30 million investment in OnDeck and LendingHome adds to previous investments in Avant and Prosper in 2016; the firm also says it is planning to fundraise for another offshore private credit fund, OPCF II; CreditEase is targeting $200 million for this fund and its investments will likely be similar with a different fund structure, varying durations, new geographies and new types of credit products. Source
The China Banking Regulatory Authority has mandated that all P2P lenders work with a custodian; a month after the requirement was announced, the majority of industry platforms have still not partnered with a custodian; most Chinese custodian banks do not offer P2P custodian services so the partnerships require added deliberation and communication; a number of new regulations are affecting the industry and it appears Chinese custodian banks will have a significant impact on the future of the industry given the online lenders they choose to partner with for P2P custodian services. Source
The Cosun Group has issued notice that it would be defaulting on its high yield debt products equal to $45 million; Cosun raised $166 million through the Ant Financial platform and is now unable to meet obligations on a portion of that amount; this leaves investors asking when they will be repaid; Ant Financial is pressing to ensure repayments are made and has stated they would help pay legal bills if investors decide to sue; the fintech giant does not share the blame as they view themselves as a platform for investors to allocate capital, but they also understand the Ant Financial name carries weight and want to help make sure there is a resolution. Source
The new partnership aims to increase access to financial services for individuals and small businesses; according to a Chinese press release translated by TechNode, the "credit factory" (in Chinese) model is a business model mainly used for credit certification of small and micro-sized enterprises as well as individuals; loans lent to such groups are small, but are lent at high frequency; the adoption of the "credit factory" mode, thanks to its high efficiency and economies of scale in handling petty loans, can help big financial firms gain some ground lost to the country's mushrooming small loan companies in the microfinance market; an upgrade to the traditional "credit factory", Dianrong-Quark Credit Factory utilizes such fintech means as big data, anti-fraud management systems and decision engine; it can help lenders reduce manual operations, save costs and cut operational risks through its powerful quantitative system when they handle credit certification for individuals or small and micro-sized businesses. Source
Dianrong announced the hiring of former Merrill Lynch and Morgan Stanley banker Yawen Cui as the new CFO; now former CFO Xuxia Kuang has been named chief operating officer; Dianrong CEO Soul Htite praised Mr. Cui: "His extensive experience managing initial public offerings, mergers and acquisitions, and financial reporting will also help Dianrong explore opportunities within the capital markets. We are thrilled to welcome Yawen to our executive leadership team."; Long Hsiang Loh, the previous COO, will remain on the executive leadership team and a new role will be announced soon. Source