A Luxembourg-based family office has launched a new asset management firm this week in a bid to introduce institutional investors and families of wealth to the peer-to-peer (P2P) finance sector.
Shepherd Capital, the family office of Yves Saint Laurent cofounder Pierre Bergé, and Paris-based alternative asset manager Eiffel Investment, launched Eiffel eCapital on Monday, and have committed $50 million to the firm's strategies.
The investment vehicle will provide investors with access to a dozen P2P platforms across the US and the UK, which on average return 5% to 10% on loans of two to five years.
"The online lending industry's explosive growth represents a fundamental shift," said Etienne Boillot, founder of Eiffel eCapital. "Today, consumers and small businesses can borrow directly from savers and investors, rather than from banks who no longer have the desire or ability to lend to them."
According to research from innovation group Nesta and Cambridge University, the UK P2P sector has generated £1.74 billion ($2.73 billion) of funding in 2014 and could exceed £4.4 billion by the end of 2015.
Increased regulatory scrutiny has also helped the sector's credibility. The JOBS Act in the US gives crowdfunding a strong legal foundation, while the UK industry is now regulated by the Financial Conduct Authority.
Boillot said Eiffel eCapital will return 2% to 3% on principal investment per month, adding that historical performance displayed “extremely low volatility” and almost no correlation to other asset classes.
Yves Saint Laurent cofounder Pierre Bergé is equally excited about the P2P lending sector, adding: “I was immediately convinced that online lending represented an attractive investment opportunity and I am fully satisfied with our returns in this market.”
Eiffel eCapital's assets range from consumer loans to small business loans, invoice discounting and trade finance. The team has been involved in the lending industry since 2009.