Maples Fund Services has extended its fund administration offering to the growing marketplace lending sector, which is synonymous with peer-to-peer (P2P) lending and encompasses a broader scope of lenders, including individuals and traditional financial intermediaries and institutions.
As increased regulation and tightening credit conditions at traditional banks force borrowers to seek out alternative channels, marketplace lending has gained popularity.
Given demand for fixed income options in the current market environment, hedge funds have recognised the sector's potential and are facilitating the introduction of institutional investors to this space.
"What began as a niche investment opportunity for individuals to lend to each other with modest infrastructure has become increasingly institutionalised," says Tyler Kim, global head of Maples Fund Services. "However, hurdles still stand in the way for fund managers who may not understand the operational difficulty of investing in this asset class."
Marketplace lending funds are often comprised of thousands of individual deals, each with specific terms and performance that turnover frequently. Current practices in record-keeping account for the value of aggregated assets but true operational integrity can only be achieved through loan level record-keeping. This is an arduous task based on the sheer volume of individual loans that compose these marketplace lending funds.
As the industry matures and more funds enter the space, third party valuations and reconciliation of books and records will be crucial to attracting new sources of capital. Acknowledging this, Maples Fund Services has made significant investments in its technology to offer loan level administration and the intuitive risk and performance reports that sophisticated institutional investors demand.
Maples Fund Services' solutions for marketplace lending funds introduce a level of independence in asset verification and valuation and ensure data integrity. By assuming certain administrative tasks – such as platform and custodian reconciliations, interest accruals, principal repayments, default monitoring and accounting for late payment penalties – Maples Fund Services streamlines the internal operations of marketplace lending fund managers so they can focus on investment decision making.
"Maples Fund Services has extended its reputation for delivering innovative technology solutions and industry best practices to the marketplace lending sector," says Scott Somerville (pictured), MaplesFS' chief executive officer. "We hope to set a new standard for marketplace lending fund administration solutions that will enable institutional investors to allocate capital to this asset class with confidence."