Returns have been predictable...and fantastic.
Until recently, institutional investors did not have a formal mechanism to lend directly to consumers. While many hedge funds invested in structured products backed by consumer debt (credit cards, auto loans, etc.) before the financial crisis, many such vehicles suffered from adverse selection and a lack of transparency. They also performed terribly during the downturn in 2008. As such, the market for ABS securitizationhas been relatively moribund since.
In contrast, direct consumer lending has long been the domain of large credit card companies and