Lending Club boosts institutional charge with senior Wall Street hires

By Daniel Lanyon on Tuesday 30 August 2016

Alternative Lending

The beleaguered giant of the marketplace lending industry has brought in two heavy weights to bolster its push for more institutional and retail investors.

Lending Club has appointed Morgan Stanley's Valerie Kay and BlackRock's Raman Suri as senior vice presidents to deepen its relationships with investors.

Several debacles at Lending Club and an apparent slowdown in the marketplace lending industry's rapid growth in the first six months of 2016 threatened - according to some commentators - to derail institutional involvement. Capital from institutions is seen as a key component to the maturation of the industry in adding serious volume and credibility. 

Valerie Kay will join Lending Club as senior vice president, head of institutional investors and Raman Suri will join as senior vice president, head of retail investors and report in to Patrick Dunne, chief capital officer, who himself joined Lending Club in July after a 25-year career at BlackRock and other Wall Street firms.

Scott Sanborn, chief executive officer and president of Lending Club emphasised the importance of institutional capital to the firm whose original growth was largely propelled by retail Investors.

"A key strength of Lending Club's marketplace lies in the diversity of our capital, including the largest retail investor base of any marketplace lender and a broad institutional investor base spanning banks, dedicated funds, asset managers and pension funds. Valerie and Raman will play important roles in helping our marketplace achieve its full potential in terms of scale and resiliency," he said.

Kay is a former executive at Morgan Stanley and Prudential Securities with 25 years of capital markets experience across a several consumer-facing asset classes. She will be responsible for institutional capital management on Lending Club's platform.

This included 12 years as a managing director at Morgan Stanley, where she held several leadership roles within Global Capital Markets team including deputy head of asset finance, head of structured asset monetisation and head of mortgage finance. Most recently she was part of the institutional securities group at the firm where she was responsible for managing relationships with some of Morgan Stanley's most important institutional investors.

"Lending Club's marketplace has transformed access to consumer credit, delivering a high-quality asset with solid returns to investors, and I'm thrilled for this opportunity to join a talented team and further build the institutional investor strategy," Kay said.

Suri held a variety of senior roles at BlackRock’s passive funds business iShares and its predecessor Barclays Global Investors including head of registered investments adviser and institutional segments.Suri will be responsible for driving the company's retail investor channel, focusing on self-directed retail, registered investment advisors, brokerage distribution strategies, and product development.

"Like iShares, Lending Club has created a platform that's levelling the playing field for retail investors, enabling them to access attractive, low-cost, high-performing financial products,"  he said Mr. Suri.

So far 2016 has been a tumultuous one for the marketplace and p2p lending space. The industry itself has taken a hit from a drop in global confidence but also a slowing of the bull run in growth that it has experienced in recent years. Lending Club as the largest and best known platform was also hit by its own series of bad news.

In May, it’s chief executive officer Renaud Laplanche stepped down amid allegations of impropriety, investment bank Jefferies pulled out of a securitisiton deal due to falsification of loan dates and subsequently its share price plummeted.

In the second quarter of  2016 Lending Club saw its origination volume decline by nearly 30 per cent compared to Q1 of 2016 although it was still marginally better than the second quarter of 2015.  Loan originations in the second quarter of 2016 were $1.96bn, compared to $1.91bn in the same period last year, an increase of 2 per cent year-over-year. The Lending Club platform has now facilitated loans totalling nearly $21bn since inception.

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