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How to bring crowdlending to institutional investors

26.04.2018 08:48
Crowdfunding

The fintech startup Lendity has launched the first Swiss diversified crowdlending bond fully subscribed by Bank Julius Baer. In addition, the start-up sees an increased interest from institutional investors and is working on two further products.

Lendity, a provider of investment solutions for alternative lending and private debt, launched a diversified bond to invest in loans from small and medium-sized enterprises as well as consumer loans originated through Swiss marketplace and peer-to-peer lenders. Bank Julius Baer, a Swiss publicly listed bank with CHF 388.4 billion of assets under management, subscribed the whole issuance of the Lendity Note.

Lendity monitors the platforms’ underwriting criteria to ensure loan quality and to proactively adjust the portfolio. “Managing risk is essential when investing in private debt. We focus on managing credit, platform, servicing, and legal risk” said Rafael Karamanian, partner at Lendity. In addition, Lendity secures meaningful allocation from platforms and negotiates attractive terms which are directly passed to bond holders.

To further reduce risk, the Lendity bond is highly diversified by loan type, grade and originating platform. The Lendity bond represents the underlying loan portfolio in its entirety with no additional counterparty risk.

Lendity’s collaboration with Julius Bär, a Swiss publicly listed bank with CHF 388.4 billion of assets under management, began during the Lendity’s participation in the F10 incubation program. After the first launch, further bonds are in the pipeline. “We are seeing an increased interest from institutional investors, our client niche, in this asset class. Therefore, we are working on new products and bringing global opportunities to the Swiss financial market. We are currently working on two specific products, one in CHF and other in USD”, told Rafael Karamanian Startupticker.

(RAN /SK)

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