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n1 [soylentnews.org] writes:

Bloomberg reports [bloomberg.com]:

Social Finance Inc., a rapidly growing online lender, is hoping to stoke investor demand for the debt it originates by starting a hedge fund that will buy its own loans -- and potentially those of its competitors.

In recent weeks, the company established the SoFi Credit Opportunities Fund and raised $15 million from investors, according to a regulatory filing and a company spokeswoman. It’s seeking to attract more money from wealthy individuals, funds of hedge funds and other institutional investors that may not want to buy whole loans directly from the company or securities backed by the debt.

SoFi, as the lender is known, and its competitors rode a wave of investor demand over the past few years that fueled a boom in originations. Concerns about the economy and consumer debt have caused some of that enthusiasm to cool. As a result, online lenders are trying to meet their growth ambitions by pursuing new strategies to entice investors.

The hedge fund will initially buy SoFi loans and could eventually put half of its capital into debt from other online lenders, according to Debra Jack, the spokeswoman.

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