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Millennials - The future of financial services

There is a demographic trend happening today that no one is really talking about. It is a trend that will ensure a major tailwind for online lending platforms and a potential headwind for traditional banks. The millennial generation (those born between 1982 and 2004) is the largest generation in history and we don’t like doing business the way our parents’ generation did. We like speed and efficiency when it comes to using products and services.

Above all else, millennials are open to a new way of doing things. We will be among the fastest group to adopt nontraditional banking services. This includes services like mobile wallets, alternative payments services and yes, peer to peer lending. It is no wonder that niche peer to peer lenders like SoFi, LendLayer and Upstart are focusing on my generation.

Upstart goes beyond simple data points like FICO score and years of credit. They take into consideration schools, academic performance and standardized test scores. For millennials with a thinner credit file, accessing credit is only available with this type of underwriting.

Looking to learn software development? LendLayer focuses solely on financing students who are looking to just that. They offer loans starting at 6.49% with no payments for 6 months. LendLayer, like Upstart, is looking at hire-ability rather than solely just someones financial situation.

In the case of SoFi, who are primarily involved in student debt refinancing, it is an immense opportunity if executed properly. Student loan debt is over $1 trillion and two-thirds of American students are graduating with some level of debt. Not surprisingly, SoFi was the fastest marketplace lender to reach $1 billion in originations (30 months).

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Shepherd Capital Eiffel Capital partnership

Etienne Boillot of Shepherd Capital is one of the most knowledgeable and influential investors within the marketplace lending space. He has quietly built equity positions in many of the leading platforms around the world, including Lending Club, and the family office he manages is one of the leading lenders on many of the most prominent platforms in Europe and the US.

Who is Shepherd Capital?

Shepherd Capital is a Luxembourg-based family office that was founded in 2010 to manage the liquid assets of Pierre Bergé, the former owner and co-founder of the Yves Saint Laurent fashion empire. In addition to investing in traditional “alternative investment managers,” Shepherd Capital has actively invested in the US and European P2P lending market since 2010 both as a lender and as an equity investor.

They created the first offshore fund providing access to Lending Club’s LC Advisor funds. They have also spent significant time, money, and brainpower figuring out how to cut through the web of UK and European regulatory and tax issues in order to allocate capital in local markets. They have also structured their funds to accept offshore capital seeking to access US, UK, and European lending platforms.

Partnership with Eiffel Investment Group

Eiffel Investment Group is an alternative asset manager based in Paris with a deep knowledge of European credit markets. They have €500 million under management specializing in corporate debt. They have historically focused on the debt of mid-to-large European companies but have been watching the marketplace lending space for some time.

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Marketplace Lending News Roundup – February 28, 2015

February 28, 2015

During the week I share the latest marketplace lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here. Peer-to-peer lending: how to beat the banks to save — or make — money from news.com.au – Some interesting borrower stories from down […]

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Highlights from the AltFi Europe Summit 2015 in London

February 27, 2015

I was in London this week to attend and speak at the AltFi Europe Summit 2015. Over 300 people descended on a conference center in central London called The Brewery (yes, they used to brew beer there) for a day of networking and education. Like last year, David Stephenson, the executive director of AltFi, was […]

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Prosper Announces Partnership With a Consortium of More Than 160 Community Banks

February 26, 2015

Hot on the heels of Lending Club’s partnership with community banks, Prosper today announced a partnership program with Western Independent Bankers (WIB). Banks who are members of WIB, will have access to consumer loans through Prosper’s platform. This includes more than 160 independent and community banks located in 13 western states. Prosper’s CEO, Aaron Vermut […]

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Lending Club Earnings Results Review – Q4 2014

February 24, 2015

Lending Club held its first earnings call announcing Q4 2014 earnings results. The stock has had incredible swings since the original IPO price of $15. The stock opened 56% higher on its debut and eventually reached a high of $29.29, only to eventually fall to a low of $18.30. It closed today at $23.65 before […]

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My Quarterly P2P Lending Results – Q4 2014

February 23, 2015

One of the most popular features for readers is my quarterly returns post. I have been sharing the details of my Lending Club and Prosper returns since the 4th quarter of 2011 and I will continue doing so. While the principle of transparency seems to be less important at the major platforms these days here at […]

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Marketplace Lending News Roundup – February 21, 2015

February 21, 2015

During the week I share the latest marketplace lending news on Twitter as it happens. Then every Saturday I take the most interesting news items and blog posts from the past week and share them here. There was a slew of negative news and predictions about the marketplace lending industry this week. Even though I am very […]

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How Ryan is Investing in Lending Club and Prosper in 2015

February 20, 2015

Many folks find it valuable to learn how others are investing on both Lending Club and Prosper, especially when they are first getting started. Many strategies are discussed on the Lend Academy forum. I thought I’d share how I am specifically investing in both Lending Club and Prosper. My strategies have changed over time and […]

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Funding Circle Receives a $420 Million Investment Commitment from Victory Park

February 19, 2015

Today, Funding Circle announced a new partnership with Victory Park Capital. Victory Park, a U.S. based alternative investment firm with headquarters in Chicago, will be lending $420 million to small businesses across Funding Circle in both the UK and US over the next 3 years. This extends an existing relationship between the two companies. Funding […]

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