Lending Club fund hit by first negative month

By Daniel Lanyon on 4th July 2016

P2P/Marketplace Lending

An $800m fund controlled and run by the beleaguered US platform Lending Club is set to suffer its first negative month in terms of returns in its 64 months of trading.

Lending Club fund hit by first negative month

The news is another blow to the P2P/market place lending giant,  still reeling from a selloff in its share price following the stormy departure of ex-CEO Renaud Laplanche two months ago.  

Performance of Lending Club's stock price over 3 months

Source: Google

Lending Club’s business model has been put into question by some analysts, but the real scandal centres on allegations that Laplanche falsified loan underwriting in a tranche of credit being sold to the investment bank Jefferies.

The fund in question, which is snappily named the Broad Based Consumer Credit (Q) Fund, invests in consumer loans originated on the Lending Club platform. It has made a positive return for investors of 0.5 per cent each month since it launched more than five years ago.

April 2016 was tougher month with the fund faltering, but just managing to deliver a smaller 0.12 per cent return.

However in a letter to shareholders, the Wall Street Journal reports, new CEO Scott Sanborn advised investors that they were likely to see a negative return for June.  


Wysars Ridcully

09 Jul 2016 07:19am

LC ex-CEO Laplance is dumping $20M of his own stock. Obviously he feels LC has great potential for the future!


05 Jul 2016 09:57pm

The reduced monthly performance was caused by a mark for the interest rate increase LC recently implemented. So... this isn't news. Its an obvious result of news from several weeks back.

Wysars Ridcully

05 Jul 2016 09:25pm

Not a non-issue. People (like me) are pulling their money out of Lending Club as the installments are paid. When nobody wants to back the loans, LC no longer has a business.

William Jourdan

05 Jul 2016 06:50pm

Just the start of the decline of Lending Club.


04 Jul 2016 04:31pm

Isn't the 'negative' month just a matter of accounting basics? With interest rates gone up, the value of older lower interest rate loans in the books would be discounted as their selling value on a secondary market would be not at par but discounted. Of course the fund is unlikely to sell these and in hold these the fund will realize gains in subsequent months. So a non-issue?

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