CLUB Certificates act as a pass-through security, an alternative to investing in long-term and illiquid loans.
Leading marketplace lender LendingClub has reached the milestone of issuing $1bn worth of its CLUB certificates to institutional investors. The certificates launched in December last year.
Club certificates were introduced as a new channel for institutional investors following feedback from LendingClub’s product buyers. It was designed as an alternative to investing in a whole loan, which can be illiquid with long maturity dates.
Institutions can invest in the certificates, which are structured as pass-through securities. This means the loans are pooled together, much like a securitisation – only without the tranching. This becomes a more liquid alternative to investing in individual loans directly.
Valerie Kay, CCO of LendingClub, said in a statement that the investment instrument has “expanded and diversified LendingClub’s investor base”.
The lender hopes to continue broadening its investors’ access in 2019 by launching a variety of new products and structures.
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.