As a marketplace lending investing analytics provider, we have already assisted in analyzing over $2B in client loan purchases, across a number of alternative lending segments. We conduct pre-purchase analysis and investment allocation work for our institutional clients in alternative lending, as well as performance analytics and loan portfolio optimization.
If you are a fund, asset manager, bank, insurance company or other institutional buyer of online lending loans, then our solutions are designed for you. Let’s take a look!
RETURN SELECTIVITY TRADEOFF AND OPTIMIZATION
Let’s start with the data set shown on the first graph below. It includes proprietary data from a number of platforms that we cover. X axis represents the percentage of loans included in the portfolio. Y axis – Average Expected Return. You can see a hypothetical initial portfolio (pointed by a red arrow). In the example of this portfolio the return is sufficient (almost 9.5%), but the portfolio is excluding roughly 95% of the overall available inventory and captures only small remaining portion. Using optimization, simulation, machine learning, and other types of selection criteria, we are able to create investment scenarios and expand our clients’ investment horizons; by either broadening the available inventory of loans and keeping same return or getting higher return with same level of selectivity. And, all within the efficient frontier.
We know how important it is for investors to understand how various criteria impact their investment returns. We have capabilities to optimize, adapt and implement our clients’ in-house developed models (both, from the algorithm and technology perspectives). And if they don’t have them – we develop them from scratch. Our value add is also in having access to data and aggregating this data across platforms. Our analytics cover consumer, business and real estate loans.
RETURN SELECTIVITY TRADEOFF/ SEGMENT DETAILS
Let’s take look at optimization across different buckets that one can potentially buy. Again, you can see the hypothetical initial portfolio and what segments of loans would be included in the portfolio if one is pursuing certain investment options. We suggest our clients optimization strategy across different buckets they can buy, incorporating how strict they want to be with certain levels of inventory. This graph “guides” investor to the optimized selectivity based on available inventory. As you move down the curve, the bars one the bottom (segment details) will specify how much inventory you are buying from different grades and terms; and also how much is included in portfolio vs. excluded. Even when platforms change the inventory mix – we help investors make the most optimal selection.
Accounts overview allow our clients to see the stratification and average statistics of their loan portfolio holdings, aggregated across accounts and platforms. This dashboard is a convenient tool to track the portfolio acquisition, it shows how the portfolio evolved over time, the trends, what kind of purchases were made and where are the concentrations.
Purchase history view is a great tool to track consistency in the purchasing volume and mix. One can monitor allocation in different quarters, months or even days. For example, you can see a ramp up or a shift from one platform to the another, or changes in weights of different risk bands/ interest rate.
On the heat map, you can see the geographic distribution. For example, what if there is an excessive concentration of the contribution to the overall delinquency at any state? Or, if you have investment limitations on certain states, this map is very useful in looking at mandates. Overall, heat map gives you a good visual representation of your loan portfolio holdings.
One more thing investors find useful is to track is the delinquency and loss pipeline across various loan states (such as current, paid off, 31-60 days late, charged off and etc.). It allows our clients to plan and anticipate charge off’s in the buckets. These data is available in percentage and $ amounts.
These are some but not all of the tools we offer. To learn more, just contact us to request a free demo. Have question? We would love to hear from you. You can shoot us an email anytime at [email protected] or call at: 415-523-0030