As hedge funds, family offices, wealth managers and other institutional investors crowd into marketplace lending – a global market projected to grow to $150 billion or more by 2020, with the U.S., U.K. and China leading the way, according to Morgan Stanley research – the need for relevant and more sophisticated risk management tools and services grows as well.
The institutional money pouring into the sector has been motivated, in large part, by low returns across the investment spectrum. Marketplace – also known as peer-to-peer (P2P) – lending has emerged as an attractive, alternative asset class, providing average yields of 6% to 9% over relatively short periods of time, Morgan Stanley says.
By Katherine Heires
(GARP Risk Intelligence, GARP.org)
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