[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s weekly newsletter (published every Sunday).[/alert]
1. [podcast] Where Blue Elephant’s Brian Weinstein is finding opportunity investing in marketplace lending (Tradestreaming)
Brian Weinstein was a portfolio manager at BlackRock, managing a $100B portfolio of fixed income assets. He left to join Blue Elephant – a startup investment firm focused on marketplace and direct lending. He joins us on the podcast this week to discuss the investment case for this changing field (and where he’s investing).
2. SEC Approves Plan to Issue Stock Via Bitcoin’s Blockchain (Wired)
Federal regulators, in a significant shift in how financial securities will be distributed and traded, have approved a plan to issue stock via the Internet.
4. Pave Raises $300 Million In The Latest Online Lending Push (WSJ)
Interest rates, schminterest rates. The flood of credit flowing into online lenders just won’t stop.
5. With E-Signatures in Wealth Management, Authentication Reigns (WealthManagement.com)
Often, digital documents contain financial and investment information, bank account numbers and other personally identifiable information that, when in the wrong hands, could be destructive to your client.
What would it take to get a managing director, managing a hundred billion dollars of fixed income assets at BlackRock, to jump ship to a start up asset manager? That’s the question I posed to Brian Weinstein, Chief Investment Officer of Blue Elephant Capital Management. His firm is a quickly growing investor in the peer to peer and direct lending space.
In Brian’s investment universe, the world is starved for yield and addicted to liquidity. When looking for his next investment, Brian and his firm pore through loan portfolios that are accompanied by lots of data to stress test performance assumptions. In his world, banks really ARE good at lending, so he’s looking at spaces where the banks aren’t participating as much in a pursuit for returns.
Brian joins me to discuss how peer to peer investors like him find opportunities by filling in some of the voids left behind by banks. We’ll hear what types of peer and direct lending he’s looking to invest in and what spaces he’s avoiding. We’ll also talk about boat finance. Yes, I said it, boat finance.
Listen to the FULL episode
What you’ll hear on this podcast:
Brian’s story of how he got to Blue Elephant: Why Brian left his PM role at BlackRock, managing $100B, to pursue investing in the burgeoning field of marketplace and direct lending
The type of research Brian and Blue Elephant conduct to determine the investability in loan portfolios coming out of marketplace and direct lenders
What spaces in direct lending Blue Elephant is looking at and which investments it’s staying away from
Why Blue Elephant likes the boat finance industry
Brian’s view on what banks are really good at and where they aren’t (or don’t participate)
Whether institutional investors should take equity positions in the marketplaces they participate in
THIS WEEK’S SPONSOR
This week’s episode of the Tradestreaming Podcast was sponsored by Collective2 — automated trading for humans.
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How do you compete when everyone’s an online lender?
The interest surrounding online lending has seen hundreds of millions billions of dollars (debt and equity) being poured into the space. In fact, the amount of money raised by US online lending startups through Q3 2015 was greater than all of 2014. Most of this capital has gone to pureplay startups — like $275M to Earnest, for example) to build out their technology stacks. Marketplace lenders have raised huge amounts of capital — from both the private and public markets — to attempt to get a foothold in the massive lending market. Online balance sheet lenders are participating heavily here, as well.
But that’s not all that’s happening. Ecommerce firms, without a traditional focus on finance, are getting into the action. PayPal just announced it had surpassed $1 billion in working capital it extended to its merchants. Amazon is expanding its lending program to sellers in multiple countries around the world. Chinese ecommerce sites and social networks and now, with Baidu getting into the game, a search engine, are providing financial services. And there are smart investors like Blue Elephant’s Brian Weinstein providing capital to get access to these new channels of finance.
So what does the market look like when everyone turns into an online lender?