Investor demand for Groundfloor’s Emerging Alternatives has been hard to miss. The last three offerings in the category all sold out before their closing dates, including the Pre-IPO Stock Finance Portfolio, which fully subscribed in early October, well ahead of its October 31 close. Previously, the Music Royalties Portfolio and SMB Growth Fund also sold out ahead of closing.
The pace of these sell-outs tells us something about how investors are building portfolios right now. Demand is concentrating in assets with distinct return drivers, defined terms, and cash flows that don’t move in lockstep with public markets.
That is the lineup we set out to build: curated, vetted opportunities across a range of durations, rates, and exposures. When equity and fixed income correlations tighten and volatility rises, genuine diversification stops being a talking point and starts doing real work.
Next Up: The Auto Finance Portfolio
On October 20, 2026, we’re launching the next Emerging Alternatives offering, the Auto Finance Portfolio. It gives investors diversified exposure to whole auto loans through a Groundfloor subsidiary.
Given how the last three offerings went and the hard-capped, limited allocation, interested investors may want to be ready on launch day. Accreditation is required, which can be verified in a few easy steps inside your Groundfloor account – no third-party validation required.
Why Auto Finance, and Why Now?
Auto lending is one of the largest consumer credit markets in the country, with $1.71 trillion outstanding as of mid-2026, according to the Federal Reserve Bank of New York. Lenders originated another $211 billion of auto loans in the second quarter of 2026 alone. Roughly eight in ten American workers get to work by car, according to the Census Bureau, so the need to finance a vehicle doesn't go away when credit conditions tighten.
Since 2023, traditional credit providers, including banks and legacy non-bank lenders, have been pulling back from auto finance. Vehicle values have declined, borrowing costs have risen, and several high-profile bankruptcies have rattled the industry. Independent dealerships are feeling the squeeze, and there are fewer active buyers for the loans they originate.
For a buyer with capital and discipline, that means loans offered at steeper discounts and more attractive yields while incumbents retreat. Groundfloor and our partners saw an opportunity to build a portfolio around that dislocation.
How the Portfolio Works
The portfolio acquires near- and sub-prime auto loans through a forward flow program. This arrangement gives the portfolio first-look access to newly originated loans, within 48 hours of origination and before secondary-market buyers can bid.
Three features define the strategy
Subscriptions will be held in Groundfloor Notes between capital deployments to limit cash drag, with distributions made monthly.
Credible partners, rigorous process
This is a Groundfloor investment, built and managed with a team of specialists. The portfolio buys loans through a Groundfloor subsidiary in partnership with Parrotfish, a New York-based specialty finance firm led by Stuart Kronick, the former head of the Structured Credit Group at Jefferies.
Loans come through the Automatic USA platform, which connects used-auto dealerships with funding sources, and every loan goes through two layers of review before purchase. First, Karus, a credit intelligence platform whose models were built on millions of loan outcomes, handles algorithmic underwriting and pricing. Second, Parrotfish conducts a manual portfolio-level review and selects which loans to acquire.
Returns depend on credit performance
The 14.0%–15.0% figure is a target. Our base case assumes a 21.4% unit default rate and 35% recovery, and results will vary with how the loans perform. The offering materials outline upside, downside, and stress scenarios, and we encourage every investor to review them before investing.
Get Ready
The Auto Finance Portfolio opens October 20. To get ready, create an account or log in, verify your accreditation, connect your bank, and transfer funds now, as they may take several days to settle before becoming available for investment.
