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Blackstone drops online lending project




By Ryan Weeks on 13th May 2016


Blackstone has dropped plans to launch an online lending platform.

 

BloombergTechnology reports that Blackstone Group – which manages more than $100bn in real estate assets – has pulled back from plans to launch an online lending platform. Around 7 months ago, we learnt that B2R Holdings, a portfolio company of the New York based Blackstone, was moving into the online lending space – acquiring the domain name Lending.com. The company was set to focus on providing online loans for small businesses and for consumer purchases of big-ticket items. Founders Jason Hogg and Nick Gould hoped that the new venture would hit $10bn in lending volume within 3 years.

 

But now B2R is once again changing tack. The company has reportedly cut loose 60 employees and is shifting its focus back to financing homes. Mr. Hogg, who had been spearheading the online lending initiative, has left the company, along with several other executives.

 

“Timing” has been cited as the primary impetus behind the shift in focus, with the situation at Lending Club looming large. The company ousted long-time CEO Renaud Laplanche on Monday, after an internal review discovered issues with the sale of $22m in loans to a single institutional investor. Laplanche’s resignation capped a difficult first quarter for the US marketplace lending sector, with the stock of both Lending Club and OnDeck plummeting to all-time lows.

 

Blackstone is not the only asset manager to have considered a foray into the world of online lending. Goldman Sachs continues to work to launch a platform of its own, one focused on direct loans to both consumers and businesses, which for now carries the codename Mosaic. Former Discover Financial man Harit Talwar is leading the project. Once live, this platform’s loans will be funded via Goldman’s New York State-charted banking subsidiary, which as of June 2015 held $128bn in assets under management.

 

We first learnt of the Mosaic project in May of last year, and various reports have since surfaced about Goldman poaching senior personnel from Lending Club and Prosper. It doesn’t feel as though Mosaic will go the way of Lending.com, even in such uncertain times as these. 

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