Investing Guide at Deep Blue Group Publications LLC Tokyo: An Advisor's Guide to Peer-to-Peer Investing - 1 views

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  #1 Yahnie Miller on 14 Jul 14

   

  Lending between individuals has been around since the beginning of human civilization. It may be the world's second-oldest profession.
  
  But in the modern era, there is little person-to-person about it.; borrowers work with institutions who have all the power; terms can sometimes be oppressive.
  
  The Internet is leveling the playing field. Online peer-to-peer (P2P) lending platforms are doing away with the banks that act as slow-moving, costly intermediaries, bringing pools of borrowers together with individual investors. For professional investment managers, the result is an alternative-and attractive-income asset class. (Why do I say attractive? See my personal experience and returns with one such platform below.)
  
  Tom Myers, a San Francisco-based principal at the wealth advisory firm Brownson, Rehmus & Foxworth, was an early adopter of P2P lending. With one of his clients on the board of Lending Club, the largest of the P2P platforms, Myers opened up a personal account. The more he looked under the hood, the more he liked what he saw as an option for some of his high-net-worth clients. Five years later, Myers now has about $75 million of client funds invested in the LC Advisors Fund, a professionally managed pool. "There's decent return for some modest risk for the kind of clientele [average investable assets of $20 million] we serve," he says.
  
  Chris Spence of Picayune, Miss.-based Diligentia LLC is such a champion of P2P lending that he established his investment firm partly to exploit the advantages of investing in it, as well as other nontraditional asset classes. The value proposition Diligentia offers clients is also nontraditional: Clients receive a guaranteed rate of return. Diligentia profits represent the spread between its net annualized returns and the guaranteed payments to clients. Spence's firm reserves the right to invest clients' funds in a variety of asset classes including, but not limited to, equity instruments, debt instruments, ETFs, real estate and, increasingly, P2P lending.
  
  Spence started using Lending Club on a personal level in 2010 and quickly became a power user. "Once I got comfortable enough with P2P lending, I took an incremental approach in bringing in Diligentia assets," he says. "I've been pleased by the net annualized returns. Both (Lending Club and Prosper) do a good job pricing their loans," he adds, and the platform's backtested results show accurate estimations of defaults.

   

  <div class="cArrow"> </div><div class="cContentInner">Lending between individuals has been around since the beginning of human civilization. It may be the <a rel="nofollow" href="http://wealthmanagement.com/alternative-investments/advisor-s-guide-peer-peer-investing<br/ >">world's second-oldest profession.</a> <br /> <br /> But in the modern era, there is little person-to-person about it.; borrowers work with institutions who have all the power; terms can sometimes be oppressive. <br /> <br /> The Internet is leveling the playing field. <a rel="nofollow" href="http://deepbluegroup.org/">Online peer-to-peer (P2P) lending platforms</a> are doing away with the banks that act as slow-moving, costly intermediaries, bringing pools of borrowers together with individual investors. For <a rel="nofollow" href="http://deepbluegroup.org/blog/">professional investment managers</a>, the result is an alternative-and attractive-income asset class. (Why do I say attractive? See my personal experience and returns with one such platform below.) <br /> <br /> Tom Myers, a San Francisco-based principal at the <a rel="nofollow" href="https://www.facebook.com/deepbluepublicationsgroup<br/ >">wealth advisory</a> firm Brownson, Rehmus & Foxworth, was an early adopter of P2P lending. With one of his clients on the board of Lending Club, the largest of the P2P platforms, Myers opened up a personal account. The more he looked under the hood, the more he liked what he saw as an option for some of his high-net-worth clients. Five years later, Myers now has about $75 million of client funds invested in the LC Advisors Fund, a professionally managed pool. "There's decent return for some modest risk for the kind of clientele [average investable assets of $20 million] we serve," he says. <br /> <br /> Chris Spence of Picayune, Miss.-based Diligentia LLC is such a champion of P2P lending that he established his investment firm partly to exploit the advantages of investing in it, as well as other nontraditional asset classes. The value proposition Diligentia offers clients is also nontraditional: Clients receive a guaranteed rate of return. Diligentia profits represent the spread between its net annualized returns and the guaranteed payments to clients. Spence's firm reserves the right to invest clients' funds in a variety of asset classes including, but not limited to, equity instruments, debt instruments, ETFs, real estate and, increasingly, P2P lending. <br /> <br /> Spence started using Lending Club on a personal level in 2010 and quickly became a power user. "Once I got comfortable enough with P2P lending, I took an incremental approach in bringing in Diligentia assets," he says. "I've been pleased by the net annualized returns. Both (Lending Club and Prosper) do a good job pricing their loans," he adds, and the platform's backtested results show accurate estimations of defaults.</div>

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