http://www.zerohedge.com/news/2016-03-13/peak-online-lending-sofi-starts-hedge-fund-just-buy-loans-itself
“Social Finance Inc., a rapidly growing online lender, is hoping to stoke investor demand for the debt it originates by starting a hedge fund that will buy its own loans -- and potentially those of its competitors,” Bloomberg reports.
The fund, called SoFi Credit Opportunities Fund, has raised $15 million so far. “It’s seeking to attract more money from wealthy individuals, funds of hedge funds and other institutional investors that may not want to buy whole loans directly from the company or securities backed by the debt,” Bloomberg goes on to note.
According to a company spokeswoman, there’s no annual fee and the fund will simply charge 25% on anything above a 3% return. The fund may also look to buy loans sold by other online lenders, in what certainly sounds like the beginning of an absurd P2P merry-go-round where everyone is selling loans to each each other.
Finally, if you needed another reason to not trust SoFi's new hedge fund, here you go (again, from Bloomberg): "Last month, SoFi said it had hired former Deutsche Bank AG co-Chief Executive Officer Anshu Jain as an adviser."
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