Blue Ridge Capital Opens New Position in Lending Club Corporation

Blue Ridge Capital started a new position in Lending Club (LC). The fund bought 3,600,000 shares worth $91 million of LC, which account for 1.10% of the fund’s total portfolio, as per the latest 13F filings for 4Q14. On the other hand, the hedge fund decreased its position in financial services and insurance company American International Group (AIG) as well as in Visa (V).

Lending Club has a 0.61% exposure to the Renaissance IPO ETF (IPO), whereas AIG has a 0.42% exposure to the iShares Core S&P 500 ETF (IVV).

Lending Club is an online financial platform that enables its borrower members to borrow money and its investor members to purchase member payment dependent notes, the proceeds of which fund loans to individual borrower members.

As the provider of an investing and lending platform, Lending Club generally provides transactional services for the online network, including screening borrowers for borrowing eligibility and facilitating payments. The company’s prospectus stated that “online lending entails significantly lower operating costs compared to traditional banking and commercial finance institutions because there are no physical branches and related infrastructure, no deposit-taking and interest payment activities and extremely focused loan underwriting activities.”

Lending Club, the world’s largest online marketplace connecting borrowers and investors, had an initial public offering (or IPO) in December 2014. The IPO was priced at $15 per share and it raised $870 million in proceeds.

In July 2014, the company said it had facilitated over $5 billion dollars in consumer and business loans since inception, $1 billion of which was facilitated in the quarter ending June 30, 2014.

In February 2015, Lending Club Corporation announced its partnership with Alibaba Group Holdings (BABA) in order to provide finance to manufacturers in the US that will enable them to purchase products through Alibaba and Chinese manufacturers.

This agreement will help customers to use LC’s system to procure loans rather than rely on banks and other lenders.

The next article will discuss Blue Ridge Capital’s position in Cheniere Energy.