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.
Insurance AI & Analytics USA (June 27-28, Chicago) is the only forum bridging the gap between the analytical and data minds and the business transformation leaders. As carriers rush to meet customer demands and deliver continuous business growth without dramatically increasing costs, deploying innovative technologies such as AI, machine learning and advanced analytics can be the only way to remain competitive. But in order to deliver real value to the organization, these innovations must have a real application in the core business areas and directly improve operational efficiency and deliver a seamless customer experience