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Omada Offers Loan Service To Clients Like Family Offices As Banks Squeeze Lending
Investment manager Omada Capital has launched a new service allowing clients to secure loans against listed shares and bonds, filling the lending hole left open by traditional banks.
UK-based Investment manager Omada Capital, which
caters to institutions such as family offices, has launched a
service that it says allows clients to secure loans against
listed shares and bonds, filling the lending hole left open by
traditional banks in the wake of the 2008 financial
crisis.
It follows a five-month trial period with customers that resulted in £35 million ($58.2 million) of loans being granted from £55 million of share collateral.
“Many banks and brokers have either withdrawn from this type of stock and bond based lending or considerably restricted the funds they dedicate to this area,” said Shahram Shoraka, co-chief executive at Omada Capital. “This has caused difficulties for many businesses and entrepreneurs and also negatively affected the operations of a broad range of family offices and investment businesses. Through our service we hope to inject fresh liquidity into this area and give these companies and institutions access to a robust and extremely flexible funding option.”
Omada hopes to ramp up its stock-based lending business this year and has targeted new business of between £250 million to £270 million. The company expects high net worth individuals, family offices and private wealth managers to account for more than half of the borrowers.
The firm offers loans set at a rate of 45-75 per cent loan-to-value and has few restrictions on the type of listed equities accepted as collateral. It has so far accepted shares listed on exchanges such as the Philippines, Turkey, Israel, AIM, Nasdaq, India, and Global Depositary Receipts.
The minimum term of the loan is 36 months and there are no customer restrictions on how the money can be spent, for example buying property or funding their businesses.
Omada provides the loans through the backing of a leading Canadian asset management firm with around £6 billion of assets, which it manages for a broad range of clients, including local city pension funds, family offices and alternatives funds.
It follows a five-month trial period with customers that resulted in £35 million ($58.2 million) of loans being granted from £55 million of share collateral.
“Many banks and brokers have either withdrawn from this type of stock and bond based lending or considerably restricted the funds they dedicate to this area,” said Shahram Shoraka, co-chief executive at Omada Capital. “This has caused difficulties for many businesses and entrepreneurs and also negatively affected the operations of a broad range of family offices and investment businesses. Through our service we hope to inject fresh liquidity into this area and give these companies and institutions access to a robust and extremely flexible funding option.”
Omada hopes to ramp up its stock-based lending business this year and has targeted new business of between £250 million to £270 million. The company expects high net worth individuals, family offices and private wealth managers to account for more than half of the borrowers.
The firm offers loans set at a rate of 45-75 per cent loan-to-value and has few restrictions on the type of listed equities accepted as collateral. It has so far accepted shares listed on exchanges such as the Philippines, Turkey, Israel, AIM, Nasdaq, India, and Global Depositary Receipts.
The minimum term of the loan is 36 months and there are no customer restrictions on how the money can be spent, for example buying property or funding their businesses.
Omada provides the loans through the backing of a leading Canadian asset management firm with around £6 billion of assets, which it manages for a broad range of clients, including local city pension funds, family offices and alternatives funds.
