Institutional Investors Increasingly Concerned by Risk of Marketplace Lending Regulation

The maturing peer-to-peer or “marketplace” lending sector continues to attract interest from institutional investors. Those investors have become more optimistic and less uncertain as the industry evolves, resulting in a sharp uptick in sector investment in 2015. Despite this optimism and growth, new concerns have emerged, such as those regarding regulatory risks in light of institutional investors’ lack of knowledge about industry regulation. Richards Kibbe & Orbe (RK&O) and Wharton FinTech have released the results of their second annual survey analyzing marketplace lending (Survey). This article summarizes the key findings of the Survey. For coverage of last year’s survey, see “Marketplace Lending Attracts Growing Interest From Institutional Investors” (Jun. 4, 2015). For additional insight from Scott Budlong, a partner at RK&O and one of the co-authors of the Survey, see our two-part “Succession Planning Series”: “A Blueprint for Hedge Fund Founders Seeking to Pass Along the Firm to the Next Generation of Leaders” (Nov. 21, 2013); and “Selling a Hedge Fund Founder’s Interest to an Outside Investor” (Jan. 16, 2014).

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