The money continues to roll in for US-based Prime Meridian Capital Management, which has secured an extra $200m in institutional funding commitments.
Prime Meridian is one of the longest-standing specialty marketplace lending fund structures in the world. The company has been investing across a range of platforms for no less than four calendar years, and recently crossed the $100m mark in assets under management. The added $200m in firepower comes as the company moves to capitalise on the rampant growth of the marketplace lending sector.
The marketplace lending space in the US is home to tremendous origination flows. Both Prosper and SoFi have lent between $6bn and $7bn on a cumulative basis, with Lending Club perched at a little over $11bn. There’s no shortage of capital chasing after these loans, and Prime Meridian will need to keep the money flowing in order to keep pace.
Don Davis, Managing Partner of Prime Meridian, commented:
“Institutional investors see the success and opportunity of marketplace lending, in terms of industry growth as well as relative performance compared to other asset classes. Our funds have been a value-added way to capture the opportunity in marketplace lending, which continues to have a bright future in our opinion.”
Prime Meridian manages multiple marketplace lending-focused vehicles. The Prime Meridian Income Fund targets the consumer lending space, the Prime Meridian Small Business Lending fund targets SME-facing platforms, whilst the Poise Lending Fund is a leveraged consumer loan fund.
As institutional involvement in the US marketplace lending space grew to a fever pitch, at the expense (to some extent) of individual investors, Prime Meridian offered those investors a chance to maintain their exposure to the asset class. The company often referred to already having “a seat at the table”, offering investors the assurance of broad based institutional access. Prime Meridian now shares that table with a vast array of major financial institutions, including the likes of Citi – but the fresh $200m would suggest that the Prime Meridian proposition remains a compelling one for investors.