A remarkable phenomenon in the global financial markets is the headlong growth of marketplace lending, sometimes referred to as peer-to-peer or online direct lending. The loans available via these lending platforms are attracting increasing attention from yield-hungry U.S. institutional investors. At the same time, operators of platforms outside the United States face challenges in channeling sufficient lender capital to would-be borrowers. A non-U.S. operator that could connect U.S. institutional capital with home-country borrowers therefore would have a unique opportunity to grow its business. One way to do this would be to create a U.S. private investment fund focused on purchasing exposure to loans on the foreign operator’s platform.
In “Marketplace Lending: Connecting American Institutional Capital to Non-U.S. Platforms,” Richards Kibbe & Orbe partners Scott C. Budlong and Jahangier Sharifi discuss how such a platform-focused investment fund might be structured, and highlight the key U.S. securities law issues to be considered in that regard.