The New Institutional Asset Class: Debt Crowdfunding

Institutional investors are still licking their wounds after the real estate market crashed and burned during the last global financial crisis. Some say we got into this financial mess because people were buying houses using their credit cards. However, there is a new asset class emerging from the global financial crisis (GFC): Debt crowdfunding. Even Mark Zuckerberg is buying his first residence with his MasterCard. As one of the world’s wealthiest people, he certainly can afford to pay for it with cash. But without new laws to limit the number of houses that we can buy using credit, we are destined to see another financial crisis in the near future. Unless you are Seth Rogen and you wish to buy one new house for your mother and another for your brother, you don’t really need to buy more than one house with your American Express. Institutional investors need to find other types of debt in which to invest their billions. And consumer debt is the name of the game. One company already is leading the way: Lending Club. Lending Club Lending Club offers a platform where members directly invest in and borrow from each other. Capitalizing on peer lending, Lending […]

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