[Update: Brendan Ross was arrested in August 2020 and Direct Lending Investments was placed into receivership. Court cases are ongoing but needless to say his company is no longer a going concern. More here.]
Bryce Mason has broken plenty of new ground in this industry. He was the first Ph. D. level statistician to do some serious analysis of the Lending Club and Prosper loan history and share his results publicly.
I first heard from Bryce in early 2012 when he shared the results of hundreds of hours of analysis he had done of the Lending Club loan history. I had never seen work that was this thorough and I encouraged him to make this data publicly available, which he did. He penned a series of excellentguestposts on Lend Academy bringing a new awareness of statistical modeling to the industry.
His work led to the creation of P2P-Picks, which allowed retail investors for the first time to access hedge fund quality credit modeling for their investments. It became very popular with Lend Academy readers, with many people, myself included, relying on Bryce’s model to choose loans from Lending Club and eventually Prosper as well.
The New Chief Investment Officer of Direct Lending Investments (DLI)
In a nutshell the Direct Lending Income Fund is the leading fund focused on high yield, short-term small business loans. The fund is now at $220 million in assets and invests in eight different small business lending platforms.
I caught up with Brendan last week to get his thoughts on hiring Bryce Mason. He was delighted that Bryce would be joining DLI as their first Chief Investment Officer. When I asked Brendan what Bryce would be doing exactly he listed four main areas:
Bryce will be working with their existing lending platforms to help them improve their underwriting processes, essentially providing free consulting.
He will evaluate new platforms for the fund.
He will be supervising the creation of a dashboard, both for internal use and eventually a client facing one as well.
He will also do some primary research in the space, producing white papers and articles.
P2P-Picks is Shutting Down
The consequence of Bryce’s decision to take the job at DLI is that P2P-Picks will be shutting down. When I chatted with Bryce last week he seemed somewhat torn by this decision. P2P-Picks has been a labor of love for him and it is with sadness that he is shutting it down. This is what Bryce said when I asked him why:
The fact is that the job will require my full attention. It is a regret. I want to communicate to the user base that I deeply appreciate their trust and support over the last three years. If not for them then I would likely not have this opportunity. It is a regret that, in some ways, I have to let them down.
Bryce went on to say that he has been doing two jobs for years. He would work at his regular job during the day and then do between 2-5 hours of consulting or work on P2P-Picks at night. The more he participated in the space the more he realized he was keenly interested in it. It made sense to give a full time job in the sector an honest try.
He has had other full time opportunities with various types of players – but feels like working with Brendan in a fund environment is most interesting because he gets to continue to make the kind of contribution that he did at the beginning. He is very much looking forward to doing due diligence and research on new and existing platforms. And like me, he is also a client of Brendan’s, Bryce is an investor in the DLI fund as well.
Alternatives to P2P-Picks
All P2P-Picks subscribers will be receiving an email from Bryce shortly giving them notice that P2P-Picks will be closing down soon. But Bryce doesn’t want to leave his users high and dry – he has been actively out looking for alternatives. Here are three options for existing P2P-Picks subscribers:
Bluevestment’s focus is to provide investors with fast access to Lending Club loans with a wide variety of investing strategies. They have an innovative pricing model that allows investors to make up to $1,000 of investments each month at zero cost. They have very flexible filtering options and they have many publicly available loan filtering strategies to help their customers stay fully invested once P2P-Picks is no longer available.
While LendingRobot is not creating a direct replacement for the P2P-Picks service they have been providing their own machine learning algorithms for some time. And they have provided automated investing for Lending Club and Prosper investors for over a year now.
Nickel Steamroller (the pre-cursor to NSR Platform – a sister company of Lend Academy) has been hosting the P2P-Picks algorithms for more than a year now. They have allowed P2P-Picks investors to use an automated solution for their Lending Club and Prosper picks. NSR has created a similar credit model called NSR-Picks, that at its core uses the same methodology as P2P-Picks. At NSR-Picks users will find selection choices similar to what they had with P2P-Picks.
These strategies, which have actually been used by some NSR clients for over a year, are now deployed on NSR Platform to enable automated investing. Clients who have less than $20,000 in their portfolios may use NSR Picks for free. P2P-Picks investors can sign up here for NSR Picks: www.nsrinvest.com/nsr-picks
A New Chapter
I would like to publicly thank Bryce for all his hard work over the past three and a half years. He has contributed immensely to the P2P lending ecosystem and many of us will be enjoying the returns from his picks for several years to come.
Now, it is time for a new chapter. I am excited for both Bryce and Brendan and I very much look forward to seeing what comes of their relationship. And I expect Bryce will continue to contribute to the community for a long time to come, albeit in a different way now.
Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.