Click to edit Master title style WALL STREET + SILICON VALLEY = - PowerPoint PPT Presentation

Click to edit Master title style WALL STREET + SILICON VALLEY = Marketplace Lending for Commercial Real Estate The Next Gen of Commercial Real Estate Finance LendIt Conference, April 2016 John Maute, Board of Directors

LendIt Conference 2016, San Francisco 1

What Made Wall Street Successful?  Information and Distribution  Combined, Power and Control  The financial institutions are in control…The Gate Keepers!  They have the broker network sourcing loans  They have the investor relationships to sell the loans  Who did the financial institutions sell loans to?  Other lenders…Participations….. “The Sharing Economy”  Securitizations of Commercial Mortgage Backed Securities (CMBS)  Public fixed income funds  Who were the investors in these funds?  You, me, and people just like us that need stable fixed income cash flow and to save for retirement 2

Who Moved My Cheese? If You Do Not Change, You May Become Extinct Source: “Who Moved My Cheese?” Dr. Spencer Johnson, 1998 3

Marketplace Lending Summarized in Six Words: “Financial Transformation via Online, Direct Lending” Traditional Lending Value Chain Apply for Banks / Package Borrower Credit / Loan Servicers Loans Mutual Tranches Securitization Investors Funds Peer-to-Peer / Marketplace Lending Investor Borrower 4

Who Moved My Cheese? Old Beliefs Will Not Lead You to New Cheese Source: “Who Moved My Cheese?” Dr. Spencer Johnson, 1998 5

Great Opportunity Comes with Great Responsibility  As this industry develops, together, we are stewards for the industry. It is our responsibility to:  Develop best practices  Help create responsible regulation  Keep out bad actors  If we fail to do it ourselves, the government will do it for us  Together, we can create an ethical and transparent system governed by appropriate regulation in order to grow and become part of the sustainable foundation of the Commercial Real Estate Finance industry 6

The Handwriting on the Wall Change Happens They Keep Moving the Cheese Anticipate Change Get Ready for the Cheese to Move Monitor Change Smell the Cheese Often So You Know When It is Getting Old Adapt to Change Quickly The Quicker You Let Go of Old Cheese, The Sooner You Can Enjoy New Cheese Change Move with the Cheese Enjoy Change! Savor the Adventure and Enjoy the Taste of New Cheese! Be Ready to Change Quickly and Enjoy it Again They Keep Moving The Cheese Source: “Who Moved My Cheese?” Dr. Spencer Johnson, 1998 7