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Orchard Platform to Publish and Distribute the US Consumer Marketplace Lending Index on the Bloomberg Professional Service

Today, we announced the re-launch of Orchard’s U.S. Consumer Marketplace Lending Index as covered by Crowdfund Insider, Lend Academy, and Global Capital. Index data is now available to subscribers of the Bloomberg Professional service, and on Bloomberg.com under the symbol ORCHLEND:IND.

“Every asset class needs a benchmark, and we’ve created the first one for the marketplace lending industry,” said Matt Burton, CEO of Orchard Platform. “Much of marketplace lending’s success to date is due to the loan level transparency on each and every loan an investor is able to select. The Index takes that transparency to a new level by aggregating terabytes of information into a usable and easy-to-understand benchmark.”

The Orchard Index seeks to measure the overall performance of U.S. consumer marketplace loans and provide investors with a useful and widely accepted benchmark to evaluate the relative performance of these loans. A complete description of the Index methodology and criteria for inclusion can be found at www.orchardindexes.com.

Orchard Re-Launches U.S. Consumer Marketplace Lending Index

Investors in Marketplace Loans Now Have a Benchmark

By Bill Ullman, Senior Advisor, Orchard Platform

Measuring performance is central to the investment business. Investors – whether individual or institutional – always want to answer the question former NYC Mayor Ed Koch loved to ask his constituents: “how am I doing?” (New York accent not included). Answering that question is not always so easy, because savvy investors look at both “absolute” and “relative” performance.

 

An investment manager may be up 15% for the year (hurray!) but simultaneously having a terrible year because the asset class in which the manager invested is up 30%. So while the manager’s “absolute” performance was a very respectable positive 15%, the “relative” performance was poor: 50% underperformance, a whopping 1500 basis points below the benchmark.

 

So how is an investor in US consumer marketplace loans supposed to answer that basic question of “how am I doing?” For starters, without an industry benchmark, it is very difficult to answer the relative performance question. Comparisons to high yield indexes, alternative assets, or other fixed income and lending asset classes are not always fair comparisons (though they certainly can be helpful and informative), because the duration of such assets could be substantially different from marketplace loans, or such assets may have no fundamental relationship to US consumer credit.

 

The newly revamped Orchard Index solves the problem of the missing industry benchmark. Orchard has created an Index that blends the returns available on major US consumer marketplace lending platforms. The Index, weighted by the net asset value of each loan, attempts to be a reasonable benchmark of performance for the entire US consumer marketplace lending industry.

 

It is by no means perfect yet. The calculation of the Index Value is being done on a monthly basis (daily would of course be better) and the Index is not yet investable. As more origination platforms grow, reach critical mass and are added to the Index, the data will certainly improve even more. Nevertheless, this Index is a great start for investors of all kinds to be able to ask and then answer the fundamental question regarding their US marketplace lending investments: “how am I doing?”

 

The Index can be found and downloaded from the following places: www.bloomberg.com (search for ORCHLEND:IND); Bloomberg subscribers will be able to access the Index and download its data and content areas at {ECST S <GO>} and as part of Bloomberg Intelligence research; or at www.orchardindexes.com.

 

By Bill Ullman, Senior Advisor, Orchard Platform

 

Read the full press release here.