Victory Park Capital is setting up a listed fund to invest in loans originated by peer-to-peer platforms, like Lending Club and Prosper.
The fund VPC Specialty Lending Investments plans to float in London and raise £200 million this year. Victory Park is not the first to launch a P2P fund in the UK. It is closely following the path of UK hedge fund Marshall Wace, which last year launched P2P Global Investments, the first listed peer-to-peer fund. This January P2P GI successfully raised £250 million via a C-share offering. The value of its shares climbed 14% between its IPO in May 2014 and early January 2015. Its IPO initially raised £200 million and by the November 2014 it was 77% invested and, according to the investment bank Liberum, was on track for full deployment by the end of January.
Victory Park focuses on middle market debt and equity investments and already has experience in the UK market. It recently committed to investing £150 million via the Assetz Capital platform over the next 5 years.
Victory Park’s floatation illustrates that investor demand for the peer-to-peer sector is rapidly increasing. In the US the vast proportion of investors in the sector are institutional, and in the case of Prosper and Lending Club as many as 80% of the investors are institutions. The launch of the Victory Park fund in the UK reflects the fact that more institutional investors are seeing the benefits and potential returns that can be garnered from this nascent industry.