LEND ACADEMY INVESTMENTS

Transcription

1 LEND ACADEMY INVESTMENTS Seven Reasons to Invest in Peer-to-Peer

2 We believe peer-to-peer lending is the most attractive way to achieve yield in the market today. 2

3 1 Put your money back to work 2 and earn steady returns 3 in a transparent asset class 4 Here are seven reasons why p2p investing might be an attractive investment alternative for you comprised of high quality borrowers 5 where you can choose your risk/return profile 6 and have solid diversification 7 for the long term. 3

4 Reason One Put your money back to work More attractive rate of return than CDs There s a reason why banks flood our mailboxes with credit card offers. 10.0% 1 Our target net return for the Lend Academy P2P Fund 7.0% 2 Lending Club and Prosper average returns 1.4% 3 The highest advertised rate for a 3-year CD Consumer credit has been one of the highest returning asset classes for decades, previously reserved only for banks P2p lending allows everyday investors to earn a high return by investing in this established asset class 1. The Lend Academy P2P Fund, LP (the Fund ) is available to verified accredited investors only. Due to the risks and uncertainties of the underlying investments of the Fund, actual events, results and/or performance of the Fund may differ materially from the target net return. 2. For a broad-based portfolio of $1.44 billion of consumer unsecured loans (over 134,000 individual loans) originated at Lending Club and Prosper, for the fully matured vintages We measure mature vintages because they have had a full opportunity to experience defaults, which reduce returns overall. Source: nickelsteamroller.com 3. CIT Bank APY for 3-year CD. Source: Bankrate.com accessed July 27,

5 Reason Two and earn steady returns The Orchard US Consumer Marketplace Lending Index 1. The Orchard US Consumer Marketplace Lending Index (the Index ) is designed to measure the performance of direct online lending to US consumers. The Index tracks the performance of the aggregate amount of loans to consumers originated and funded on eligible US-based online lending platforms. The Index was created on 12/31/13. Lend Academy Investments believes the Index will become a definitive measure of US p2p returns over time. The most up to date Index may be found at 5

6 Reason Three in a transparent asset class Peer-to-peer lending is built on transparency Both Lending Club and Prosper make their entire multi-year loan history available for download and analysis Investors can analyze this history using desktop applications like Excel, commercial software like SAS, or third-party statistics sites like NickelSteamroller.com Lend Academy Investments employs PhD statisticians and experienced credit analysts to derive sophisticated loan selection algorithms for our clients. Compare the transparency of p2p with what you get out of a CD Where is my money going when I invest in a CD? What s underlying my investment? Why are CD returns so low? How much am I leaving on the table? Who wins? 6

7 Reason Four comprised of high quality borrowers By investing only in high quality borrowers, you are investing in a portfolio of creditworthy people. Most of these borrowers have many options for a loan, and apply for a p2p loan because the interest rates are lower than what they can find elsewhere % Approximate average FICO score of borrowers on Lending Club and Prosper Minimum FICO score to be considered for a loan at Lending Club and Prosper Approximate percentage of rejected loan applications at Lending Club and Prosper 7

8 Reason Five where you can choose your risk/return profile Risk Indicators Platforms like Lending Club and Prosper ascribe loan grades to borrowers and assign interest rates commensurate with perceived levels of risk 1 Choose Your Risk Level Lend Academy Investments manages individual account portfolios of consumer loans using strategies appropriate for each client s risk appetite 2 Investment Strategy Target Net Returns 3 Approx. Average FICO 4 Aggressive 9.00% 697 Balanced 7.00% 711 Conservative 5.00% Investments in p2p loans involve certain risks, many of which are enumerated in the Form ADV of Lend Academy Investments, which can be found at All investors should consult an independent investment and tax advisor prior to making a p2p investment. Image source: nickelsteamroller.com, capturing Prosper interest rates from October 2012 to August For example, a conservative investment strategy is designed to withstand an economic shock, or spike in unemployment, better than an aggressive investment strategy 3. Due to the risks and uncertainties of the underlying investments of the portfolios, actual events, results and/or performance may differ materially from the target net return. 4. As measured using historical loans issued between January 1, 2012 and March 17,

9 Reason Six and have solid diversification P2p adds diversification to your overall portfolio By holding a broad range of uncorrelated asset classes you can minimize your downside risk P2p loan portfolios are generally uncorrelated with many other standard investment classes, such as stocks and bonds, therefore providing diversification to an investment portfolio We build diversified p2p portfolios for our clients Like any investment, it s important not to put your eggs in just one basket. By building a portfolio of many loans, the negative impact of default by any individual borrower is materially reduced Lend Academy Investments uses a minimum target of 400 loans per portfolio 1 Our loan selection algorithms rebalance key characteristics of our client portfolios as we reinvest cash to achieve target returns 1. For many portfolios we invest in fractional loan interests as low as $25 per individual loan, thereby increasing the diversification within our clients loan portfolios.. 9

10 Reason Seven for the long term. P2p investing is for the long term Underlying loans typically range from 36 to 60 months in length, and cashing out of a portfolio takes time Mitigating this issue, we believe the secondary markets will continue to develop, providing liquidity to everyday investors, similar to how the NASDAQ helps stock market investors maintain agility For Lend Academy Investments investors, that means being happy with high returns for a long time, and we think that s a pretty good option 10

11 Lend Academy Investments delivers the ability to invest in p2p confidently and safely across the country and around the world. 11

12 Thank You invest.lendacademy.com