Lending Club fund hit by first negative month

By Daniel Lanyon on Monday 4 July 2016

Alternative 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.

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.  

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