After More Than A Year Wait, The First ’40s Fund For Peer Lending Has Been Approved
As of late, Peer Lending platforms have been struggling to find permanent capital. In what must be considered welcome news for the industry, the first closed-end fund has finally been approved by the SEC. While the fund has not specifically disclosed which platforms it will be working with, this potentially has large ramifications for marketplaces like Lending Club (NYSE: LC), Prosper and Sofi. As stated in the company’s application, no more than 45% of Managed Assets will be invested in loans originated in any single platform, so any money raised by the fund will be spread across multiple platforms.
A Notice of Effectiveness was released on August 19th, 2016 for the RiverNorth Marketplace Lending Corporation. According to regulatory filings, the company has been approved to sell up to \$1B in shares, and anticipates selling \$500M in shares within the first year. The company filed its application over a year ago, in June 2015.
The fund will be run by Patrick Galley and Philip Bartow, and is targeting long-term institutional investors. As stated in its filing, the RiverNorth Marketplace Lending Corporation has no plans to list on an exchange, requires a minimum investment of \$1M, and will only allow redemptions once per quarter.
Three companies were in the running to be the first ’40s fund for Peer Lending: RiverNorth Capital Management, Direct Lending Investments, and Van Eck Overland. Van Eck’s efforts to become the first US publicly traded closed-ended fund are ongoing, while Direct Lending quietly withdrew its application in June 2016.
- Stephen Zentner
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