LendingRobot, the first robo-advisor for Alternative Lending built for individual investors, announced today the launch of robo-fund LendingRobot Series. Designed as an alternative to traditional fixed income investments, LendingRobot Series is a one-stop solution that combines cloud-based investment automation, fully transparent fund secured by Blockchain technology and sophisticated machine learning algorithms to provide superior, predictable returns uncorrelated to stock market performance.
LendingRobot Series is a unique combination of a robo-advisor and an investment fund, created as a one-stop solution for accredited investors looking for a way to easily invest in consumer, small business or real-estate loans diversified across multiple peer lending origination platforms.
“Alternative lending proved to return excellent performance and with new origination platforms growing quickly comes the opportunity to diversify further. But fragmentation makes investing even more complex for individual investors,” said Emmanuel Marot, CEO of LendingRobot.
Unlike a traditional fund, LendingRobot Series improves liquidity, is flexible with regards to loan selection, and 100% transparent. Investors decide what kind of risk and time horizon they want, and LendingRobot automatically manages their investments.
Hedge Funds typically charge management fees of 2% plus 20% of performance, plus obscure or unlimited fund expenses, which makes their expense ratio disproportionate to fixed income returns. In contrast with traditional investment firms, LendingRobot Series only charges 1.00% of assets under management, and caps fund expenses at 0.59%.
“Turmoil within the past twelve months among some of the largest origination platforms showed that ‘platform risk’ is real, and left many clients increasingly worried about investing only in unsecured consumer loans despite the fact that the returns have remained steady,” continued Mr. Marot. “All investors would be well served by diversifying into multiple marketplaces, but that process is tedious, complicated, and requires a high degree of domain expertise to accomplish correctly. That’s why we’ve created LendingRobot Series: to provide investors that understand the value of investing in Alternative Lending with the confidence that comes from intelligent automation, easy liquidity, and complete transparency.”
LendingRobot manages investments across four different Series, with target maturity ranging from 20 to 36 months, and net returns up to 9.66%. Investors' money is converted in Units of ownership in these Series, that are issued on a weekly basis. By default, loans payments keep being re-invested and the Units value increases. LendingRobot publishes every week a detailed ledger of its holdings, down to the value and individual payments made by each note.
A ‘Hash code’ signature of the ledger is integrated in the subsequent versions as well as notarized in Ethereum’s Blockchain to ensure the data is tamper-proof.
To ensure maximum safety, assets are held in a bankruptcy protection vehicle, with no other liabilities than its investors.
Investors willing to cash simply flip a switch on the LendingRobot website to start redeeming their Units on a weekly basis. Between 33% and 100% of loan payments are distributed in priority for redemption, which means that under normal circumstances investors should be able to cash out entirely in less than 3 weeks.