RiverNorth launches marketplace lending fund

By Ryan Weeks on Friday 30 September 2016

Alternative Lending

RiverNorth Capital Management, LLC, the specialist investment manager with around $3.4bn in assets under management, launches much-anticipated marketplace lending fund.

RiverNorth Capital Management, LLC has launched a new, non-listed closed-end fund – RiverNorth Marketplace Lending Corporation (NASDAQ:RMPLX) – which will invest across the marketplace lending sector. Its mandate spans unsecured consumer loans, SME loans and specialty finance loan segments.

RiverNorth is the first closed end vehicle in the US to dedicate itself to the marketplace lending sector. There are a handful of similar fund structures listed on the London Stock Exchange, headlined by the £870bn P2P Global Investments.

“RiverNorth is among the first to offer retail investors this tremendous opportunity, that of providing diversified and efficient access to the peer-to-peer lending space,” said Brian Schmucker (pictured above), chief executive officer of RiverNorth.

RiverNorth warns investors that the fund's shares will not be immediately listed on an exchange, and may never be. The firm advises that a secondary market for shares in the fund is unlikely to develop without the shares being listed.

However, in accordance with Rule 23c-3 of the 1940 Act, the fund must make a quarterly repayments offer equal to at least 5 per cent of the outstanding shares (the exact percentage offered will be determined by the board of directors). This could provide some liquidity to investors, although there is of course the possibility that repurchase offers will be oversubscribed, thus preventing investors from liquidating their holdings.

“Our team continues to innovate in providing our investors with distinctive strategies,” said Patrick Galley, chief investment officer at RiverNorth and co-portfolio manager of the fund. “The Fund offers investors a way to gain efficient but diversified exposure to the marketplace lending space with attractive yield potential. The interval format offers periodic limited liquidity to an otherwise illiquid asset class.”

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