Third party investment tools are becoming increasingly popular among investors who are looking to deploy capital to p2p lending. One of the most recent developments has been the ability to buy and sell loans on the secondary market via an API. LendingRobot, who has already made available custom automated selling and buying now is expanding their product offering with a feature they are calling Adaptive Portfolio Rebalancing (AdPR). I spoke with Emmanuel Marot, CEO and Co-Founder of LendingRobot to learn more about AdPR.
The new feature furthers LendingRobot’s desire to automate the entire investing experience with p2p lenders Lending Club and Prosper. Available for users who have at least $20,000 actively managed by LendingRobot, the new technology will comb through your portfolio to look for opportunities to buy underpriced loans or sell underperforming ones. This feature is currently only available for Lending Club investors.
From the press release, Emmanuel stated:
Robo-advisors have largely been considered tools that perform two basic functions: create a properly diversified portfolio and reinvest new cash or income according to a static investment strategy, but we are capable of so much more. The real dream of these kinds of algorithmic solutions is a super-human financial advisor that monitors and takes advantage of every single opportunity to improve your returns 24 hours a day. With Adaptive Portfolio Rebalancing, we are taking a massive step in that direction.
I asked Emmanuel to first touch on the current state of the secondary market with Lending Club. He noted that there has certainly been an increase in volume in the last year, but the total market still remains fairly small. Given the recent news with Lending Club, there has actually been an increase of notes for sale which Emmanuel said has been an opportunity for some of their clients. However, the secondary market remains an inefficient market with many loans priced too high and some too low, but LendingRobot felt there was an opportunity to be opportunistic and they are certainly looking to the future with AdPR. [Read more…]