Blue Elephant Capital Management

i24NEWS Clearcut Interview: Blue Elephant CIO Brian Weinstein on Stock Markets

Brian Weinstein, the Chief Investment Officer of Blue Elephant Capital Management, catches up with Michelle Makori, host of Clearcut on i24NEWS.  Topics include reasons for the resilient, low-vol equity market despite the recent chaos from the Trump administration, Jamie Dimon’s Trump-focused statements from this week’s JPMorgan Chase shareholder meeting, recent layoffs at Ford signaling a slowdown in the US auto industry, and the outlook for US economic growth.


Investor Q&A with Prosper Investor: Brian Weinstein

Source: Prosper Marketplace (Remi Harrad) Brian Weinstein is the Chief Investment Officer of Blue Elephant Capital Management, a New York based firm founded in 2013 to pursue marketplace and other direct lending investment opportunities. We reached out to learn more about Blue Elephant and Brian’s experience working with Prosper. Here’s what he had to say: First, tell us a little bit about yourself. When did you first discover marketplace lending and how did you get involved? My involvement with marketplace lending is a bit accidental – as most great things are. My background is in fixed income trading and asset allocation. I worked at BlackRock for 17 years on the fixed income side – at the end I ran a very large institutional fixed-income business. When I left, I made it my mission to explore new and different opportunities. At the time I thought the emerging marketplace lending industry was really interesting and believed that direct lending was going to be the next big market to open up to fixed income investors. Around the same time, I ran into a couple of guys I knew (also from the fixed income world) who had experience in the space and they became … Continue reading

Learning From Online Lending’s Stumble

For online lending to regain its footing, it must address the risks inherent in the emerging asset class and clean up the ecosystem. Online lending had enjoyed significant wind in its sails over the past five years. Aided by the post-Great Recession healing of the credit cycle, lenders were able to originate increasing but limited volumes of loans that provided much needed yield to investors. Along the way, a myth developed that online lending could grow infinitely, stealing business away from big banks while providing investors with the Holy Grail of investing – high returns and minimal risk. With traditional fixed income yields reaching unpalatable levels across the globe, investors piled in, giving online lenders the capacity to grow at breakneck speed. This growth came to a screeching halt earlier this year, as a combination of deteriorating performance and corporate governance issues came to light. While Lending Club’s management issues grabbed the headlines, the real devil is in the performance details. It turns out that as online lending volumes increased, so did the problems. Competition for borrowers pushed lenders to lower rates and increase capacity more quickly than their models could handle. Defaults rose and returns fell accordingly – and … Continue reading

Thought Piece: Marketplace Lending’s “Hobson’s Choice” Problem and the Need for Fiduciaries

The marketplace lending landscape has been changing rapidly over the past few months and I’ve been quite vocal that this is a great opportunity to allocate capital into loan investments. The more I think about the landscape, the more excited I get. Based on Prosper’s most recent estimates, the loans that they originate after April of 2016 will have over one-percent higher returns than their 2015 vintage. My guess is that the performance differential will be even greater, as the pressure on the marketplace lenders to perform is only increasing. While the opportunity set has become more attractive, it does not mean that gathering loans blindly is a good strategy. Lenders, no matter how careful, are going to make loans that default. Part of this is simple – no lending model is perfect. Beyond that, there are forces well beyond a lender’s purview, such as broad economic forces that change the landscape faster than their models can adjust. There is a wide gap between being a lender and being a fiduciary to those buying loans. The lender guarantees that the loans that they issue fit a certain set of criteria — a FICO band, for example. From there, they distribute … Continue reading

CCTV America interview with Brian Weinstein: FOMC Rate Hike Outlook

CCTV America’s Michelle Makori spoke to Brian Weinstein, Chief Investment Officer for Blue Elephant Capital Management, on the Federal Reserve leaving interest rates unchanged, Brexit, and his global macro outlook.