A $700m LendingClub investment fund that's struggled with withdrawals this year posted a negative return for August, the first monthly decline in its five-year history.
LendingClub has been trying to assuage loan investors spooked by the surprise resignation of the company’s founder in May and an uptick in write-offs. The fund buys unsecured consumer loans arranged on the company’s online platform. In June, the investment vehicle was forced to limit redemptions after stakeholders asked to pull out $442 million, or 58 percent of assets under management. But in the case of the August slump, key developments had already been signaled, with the largest hit coming from a one-time adjustment as the firm improved how it values holdings, Sanborn wrote in the letter. He became CEO in May after the company disclosed that employees had altered loan documents sent to an investor and that the prior CEO had failed to publicly disclose his interests in a fund that LendingClub was considering investing in.