Hacker News Reader

Comment by elecengin | Hacker News Reader

An interesting tidbit embedded in the news is that $22mm in loans was sold to a single investor - the model they talk about on the website is peer to peer, but this appears more peer-to-institutional-buyer (which I always kind of suspected, but this clarifies it)...

An article on the trend: http://qz.com/355848/wall-street-is-hogging-the-peer-to-peer...

View on HN

The language around the industry has changed over the past year as institutional investors began to make up more of the loan buying volume-so the name changed from "P2P" to "Marketplace Lending"

I think a lot of their volume is peer-to-peer, though, and there's nothing saying this $22m was from an institution and not a rich individual (though an institution seems more likely). I imagine this is more of a case of "I have a lot more money than your normal customer so I want special treatment" and Lendingclub then abusing that to take advantage of the investor. I wonder if the investor had taken their $22m to the automated web platform and setup their investment criteria if this would never have occurred.

I think you're dramatically underestimating the degree to which institutional investors are involved in peer-to-peer. There are entire software startups selling analysis software to hedge funds for peer-to-peer lending.

It almost certainly was not a single wealthy individual.

> I think a lot of their volume is peer-to-peer, though, and there's nothing saying this $22m was from an institution and not a rich individual

From the original article:

"The investor that initially bought the LendingClub loans in question was Jefferies LLC, according to people familiar with the matter."

But how many loans was that? If that's $25 in 1 million loans, then there are other peers on each loan. Whereas if it's 22 thousand 1k loans, it's definitely just an alternative route to institutional lending.

Reply on news.ycombinator.com