Prime Meridian Capital Management Secures $200 Million in Institutional Commitments to Capitalize on Marketplace Lending Growth
Prime Meridian Capital Management, a specialty asset manager of marketplace lending investment funds, continues to see positive capital inflows from investors seeking access to diversified, seasoned loan portfolios that are efficiently originated through online Peer-to-Peer (P2P) marketplaces.
Its flagship Prime Meridian Income fund now has four calendar years of consistent performance, with no drawdowns, which has caught the attention of institutional capital. Last year Prime Meridian crossed the $100 million mark in assets under management.
“Institutional investors see the success and opportunity of marketplace lending, in terms of industry growth as well as relative performance compared to other asset classes,” says Don Davis, Managing Partner of Prime Meridian. “Our funds have been a value-added way to capture the opportunity in marketplace lending, which continues to have a bright future in our opinion,” Mr. Davis added.
Last year, the Orchard US Consumer Marketplace Lending Index out-performed many asset classes, including the S&P500 Index and the Barclays Aggregate Bond Index. The Orchard US Consumer Marketplace Lending Index was up 6.24% for the year through November 30th (equal to a 6.8% annualized return for 2015), compared to a 1.38% return for the S&P500 Index and 0.55% return for the Barclays Aggregate Bond Index for 2015, including dividends. *
Morgan Stanley predicts that the global marketplace lending industry will be worth $290 billion by 2020 (base case). With nearly a trillion dollars in outstanding credit card debt in the U.S. alone, marketplace lending to consumers is one area where the industry has only scratched the surface. **
Marketplace lending is a term used to define alternative ways of lending, typically through online platforms such as Prosper, Lending Club, and Funding Circle. Marketplace lending platforms provide an alternative to banks and traditional lending sources for borrowers, as well as create new investment opportunities for individual and institutional investors who participate in these platforms. Marketplace lending and P2P (peer-to-peer) lending are essentially synonymous terms.
About Prime Meridian
Prime Meridian Capital Management is an alternative investment manager specializing in marketplace lending including P2P lending and online lending platforms. The Prime Meridian Income Fund specializes in P2P consumer lending while the Prime Meridian Small Business Lending Fund utilizes small business lending platforms, and Poise Lending Fund is a leveraged consumer loan P2P fund. For more information contact Don Davis at 925-362-8510, or visit www.pmifunds.com. Prime Meridian Capital Management is an affiliate of Novus Investments, an alternative investment management firm.
*orchardindexes.com, ishares.com
**morganstanley.com/ideas/p2p-marketplace-lending