Chinese fintech giant invests via leading US marketplace lenders.
CreditEase Wealth Management, an arm of Chinese fintech giant CreditEase, has today unveiled investment deals worth $30m with OnDeck and LendingHome. The money comes from CreditEase Wealth Management's Offshore Private Credit Fund (OPCF), which raised $80m from its high net worth Chinese clients in late 2015.
The fund has previously invested via US consumer lenders Avant and Prosper. CreditEase is the majority owner of Yirendai, which raised $75m at a valuation of around $575m via an IPO on the New York Stock Exchange in December 2015. Yirendai is a Chinese consumer lending marketplace, in the style of Lending Club.
CreditEase says that OPCF is the first Chinese offshore fund to have arranged loan purchases with western platforms, thereby offering investors much sought after exposure to western private credit. The firm adds that the full $80m of OPCF firepower will be deployed by month's end. Like Yirendai, OnDeck is listed on the New York Stock Exchange. It is among the best known small business focused alternative lenders in the world, with a presence in the US, Canada and Australia. Rival small business lender Kabbage was recently rumoured to be considering raising funds for the purpose of acquiring OnDeck, but there is little evidence to substantiate these claims.
Lending home is an online marketplace for short-term bridging loans and consumer mortgages. The firm has originated over $1 billion in mortgage loans to date.
Given the popularity of peer to peer lending in China, and the relative lack of sophistication exhibited by local platforms, vehicles such as CreditEase's OPCF could have a bright future, even if these initial investments are relatively small in size. For context, Prosper recently secured a $5 billion loan purchasing deal with a consortium of institutional investors.
Richard Williamson, head of offshore business at CreditEase Wealth Management, said that the firm has been “particularly diligent” in its investments following significant market volatility in 2016. He said that CreditEase has screened over 90 different lending platforms and fund managers around the world over the past several months.