Marshall Wace operation ventures into private equity

Investment strategy of firm’s new vehicle will be similar to that of MW Eaglewood’s existing investment trust which invests in peer-to-peer lending

The hedge fund’s MW Eaglewood business is targeting institutional investors in Europe and the US to raise a $ 300 million fund that will lock up capital for seven years but will pay a coupon rate, which has not yet been set, according to a person familiar with the matter.

The investment strategy of the vehicle, which is expected to be raised by early 2017, will be similar to that of MW Eaglewood’s existing investment trust P2P Global Investments, which invests in peer-to-peer lending, the person added.

Peer-to-peer lending has enjoyed a surge in popularity in recent years, even though charge-off rates – loans lenders do not expect to charge – rose over the summer.

Analysts at technology and advisory research firm Technavio forecast the market to grow by a compound annual growth rate of more than 53% until 2020.

Simon Champ, chief executive of Eaglewood Europe, was an early investor in Betfair, and is known for his efforts to bring permanent capital to the sector. He and Marshall Wace won the Editor’s Choice Award in the 2015 Financial News Hedge Fund Awards for effectively creating a new asset class.

MW Eaglewood now manages about $ 2 billion of assets.

Marshall Wace, which manages $ 24.9 billion and specialises in managing long/short equity hedge funds, hired Champ and his team from Liberum.

Marshall Wace’s founders, Paul Marshall and Ian Wace, backed the growth and development of the fund and also acquired Eaglewood Capital Management, which had a similar but more developed business in the US.

The move to start a private equity-style product is also significant given private equity giant KKR formed a long-term strategic partnership with Marshall Wace in 2015, taking a 24.9% stake in the firm.

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