In this interview, Daan Potjer from Dynamic Credit (speaker at Marketplace Lending event) tells us about how he sees the marketplace lending market and what impact this will have on the financial future. What is the importance of the secondary loan marketplace?
Dynamic Credit is an asset manager and adviser in loans and loan portfolios. It is also an originator of Dutch mortgage loans. We recently launched the Loan Clear loan portfolio marketplace.
Dynamic Credit was the first to launch investment mandates in Dutch mortgage loans in March 2014. Now we have over EUR 6.5 billion in mortgage mandates and in December 2015 we launched the first online mortgage provider of the Netherlands, bijBouwe. Clients can get a bijBouwe mortgage loan online via direct execution, online with advice or via their own independent advisor. It is a huge success. Last month we had over 6% market share, so that caught on very well.
A lot of investors, especially pension funds and insurance companies, so the long term locked up capital, are switching from investing in bonds and securities, to investing in direct loans. For example mortgage loans, but also consumer loans. When these investors hold these loans on their balance sheets or in certain vehicles, they’re more or less stuck with it, because there is no market in them. But when investor preferences change, when their asset & liability preferences change or when there are changes in rules and regulation, people might want to adjust their exposure to these loans. It is therefore very important for this illiquid market that there will be more liquidity. That is one of the reasons why a secondary loan marketplace is so important and that is why we have launched the LoanClear loan portfolio marketplace.
The banks are withdrawing from making new loans, because they’re shrinking their balance sheets. It is very logical for other parties to come into the market to take over the role of providing credit. Currently there are a lot of parties entering the market that do this. Not all of them use very strict criteria for granting loans. I believe there will be a shake out between the parties that do use strict criteria and originate good credit and parties who are just originating because they can. When the credit cycle turns down, you will see a huge difference between performance and loans originated by the platforms who use strict criteria and the ones that don’t. As an investor you must therefore look carefully at how strict the platforms are when they originate loans.
Geplaatst op: 23 juni 2016
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