One of Europe’s biggest hedge fund managers, Marshall Wace LLP is investing in P2P in a substantial way. The portfolio will include a closed-ended P2P Global Investments PLC fund, run by Marshall Wace. It is aiming to raise $310 million in an initial public offering, but that could go up to as much as almost $387 million.
The fund will use in-house computer programs to pick loans that are attractive on P2P lending platforms where borrowers and lenders match-up directly online. Some of the platforms the fund plans to monitor include Funding Circle, RateSetter, Zopa and Crossflow Payments.
Marshall Wace runs more than $17 billion in assets started its own peer-to-peer lending business in late 2013, reports The Wall Street Journal. Last month the company announced plans to buy U.S. firm Eaglewood Capital Management LLC, which has now been tapped to run the new fund.
CEO of Eaglewood Europe, Simon Champ, says P2P lending gives better pricing to both borrowers and lenders.
“As a borrower you get assigned an individual interest rate. As a lender you can pick who you lend to,” he said. “Banks price their products to suit themselves. I don’t think peer-to-peer lending is going to change the whole of banking. It’s deliberately targeting small loans where the heavy cost of banking weighs.”
P2P lending makes up a small number of both business and consumer loans, but that number has been climbing steadily over recent years, drawing the attention of investors as banks are increasingly cautious and shying away from some areas of lending, due to pressure from financial regulators.