Author Topic: Stoneridge P2P mutual fund (LENDX)  (Read 8264 times)

Fred93

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Stoneridge P2P mutual fund (LENDX)
« on: September 06, 2016, 08:56:05 PM »
In June, Stoneridge revealed a US mutual fund which invests in P2P loans.  Symbol LENDX.

They've announced that this fund "may" invest "more than 25%" of its funds in Lendingclub, Prosper, or FundingCircle individually.  Makes sense, as these are the three major players. 

So... This isn't so terribly exotic.  Its the kind of thing most of us here do.

Prospectus can be found at ...
http://stoneridgefunds.com/documents/LENDX_prospectus.pdf?v=009

It would appear that this fund is intended to be marketed to institutional customers.  There are giveaways like the $15M minimum investment, although it would appear that "clients of institutional customers" will have a lower unspecified limit.

But... These institutional customers would have to be stupid institutional customers, because the fees on this fund are laughable.



3.74% per year for what is most likely an automated index-like fund of loans from the three major originators.  How hard is that?  Do you think that is worth 3.74% per year of fees?  Gosh, I don't think so.
« Last Edit: September 06, 2016, 09:13:22 PM by Fred93 »

PhilGD

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #1 on: September 06, 2016, 09:54:25 PM »
I don't understand why this fund has loan servicing fees. Isn't the servicing done by the platforms even for whole loan buyers?

Fred93

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #2 on: September 06, 2016, 10:38:30 PM »
I don't understand why this fund has loan servicing fees. Isn't the servicing done by the platforms even for whole loan buyers?

I had the same reaction.  I think the answer is "because they can".  It sounds like something legit to those who have no familiarity with the assets in question.

AnilG

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #3 on: September 06, 2016, 11:49:23 PM »
Doesn't seem like mutual fund, more like hedge fund. Unlisted  Closed end interval fund with restricted redemption.
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Fred93

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #4 on: September 07, 2016, 01:19:34 AM »
Doesn't seem like mutual fund, more like hedge fund. Unlisted  Closed end interval fund with restricted redemption.

Has some funky features, but it is a closed-end fund, and it is listed on NASDAQ.

http://www.nasdaq.com/symbol/lendx
https://finance.yahoo.com/quote/LENDX?ltr=1

AnilG

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #5 on: September 07, 2016, 02:56:29 AM »
My bad. Prospectus made it sound like unlisted closed end interval fund. I didn't look in detail how they are going to report their holdings, hiding loans behind SPVs like UK funds or more transparent with loan profiles. Considering all such UK funds despite holding 2/3rd of US MPL loans are trading at discount, I will wait to see what happens to US funds.

Doesn't seem like mutual fund, more like hedge fund. Unlisted  Closed end interval fund with restricted redemption.

Has some funky features, but it is a closed-end fund, and it is listed on NASDAQ.

http://www.nasdaq.com/symbol/lendx
https://finance.yahoo.com/quote/LENDX?ltr=1
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ryancar6

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #6 on: September 07, 2016, 02:36:30 PM »
So unless this is over my head, why would they choose to use this with such high fee's? Are there other options out there?

rawraw

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #7 on: September 08, 2016, 04:43:22 AM »
Perhaps they justify the fee with the use of leverage and access to certain credit markets that aren't as easy to access (like the syndicated market, perhaps?)

dompazz

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #8 on: September 14, 2016, 08:51:06 AM »
Just curious, how much would you be willing to pay in fees for an unlevered fund?  Assume it is a traded fund so you could get in and out at will?  What about a levered fund?

rawraw

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #9 on: September 14, 2016, 06:51:56 PM »
Just curious, how much would you be willing to pay in fees for an unlevered fund?  Assume it is a traded fund so you could get in and out at will?  What about a levered fund?
Unlevered fund of LC loans?  I'd be willing to pay very little in fees

dompazz

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #10 on: September 14, 2016, 08:26:55 PM »
Unlevered fund of LC loans?  I'd be willing to pay very little in fees

Even if you got daily liquidity through a traded closed end fund? 

What would you pay for a levered fund?

rawraw

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #11 on: September 15, 2016, 05:05:19 AM »
Unlevered fund of LC loans?  I'd be willing to pay very little in fees

Even if you got daily liquidity through a traded closed end fund? 

What would you pay for a levered fund?
The thing is you can't make illiquid things liquid. There will be a point where I actually need the liquidity but it won't be there.

Leverage I'd have to think about. Mostly comes down to the cost of debt and the net return I'd expect through a cycle

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dompazz

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #12 on: September 15, 2016, 08:31:29 AM »
Think about a closed end muni-bond fund.  Those underlying bonds don't trade much.  You can get in and out of those at anytime during trading.  Yeah, they rarely trade at NAV.  So what?

If you are a small investor and you want exposure to muni's they are one of the only ways to get that exposure.  Why couldn't someone do that for p2p loans?

Theta

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Re: Stoneridge P2P mutual fund (LENDX)
« Reply #13 on: September 29, 2016, 04:22:31 PM »
Think about a closed end muni-bond fund.  Those underlying bonds don't trade much.  You can get in and out of those at anytime during trading.  Yeah, they rarely trade at NAV.  So what?

If you are a small investor and you want exposure to muni's they are one of the only ways to get that exposure.  Why couldn't someone do that for p2p loans?
http://www.lendacademy.com/van-eck-overland-launching-a-closed-end-fund-investing-in-online-loans/

Van Eck is. It hasn't IPO'd yet though.  Looks like it will soon - at least by year end.  ELND will be the symbol.

Here is the SEC filing from yesterday https://www.sec.gov/Archives/edgar/data/1648215/000093041316008332/c85506_n2a.htm