Secured marketplace lender Ablrate has launched a new secondary trading platform, the firm said. The platform has introduced liquidity to the market and allowed new investors to access assets immediately, chief executive David Bradley-Ward told PDI.
Bradley-Ward added that the online lender is in discussions with a number of institutional investors about lending via the platform. The business is targeting lending volume of around £100 million ($156 million; €143 million) by the end of the year.
Synthesis, the Luxembourg-based marketplace lending investor, is the firm’s only source of institutional capital so far, but a major investment from a private individual is set to boost the platform’s lending capacity. Meanwhile, next week, a single aircraft finance transaction is expected to double the volume of loans executed via Ablrate from £2.1 million to around £4 million.
The firm is seeking to partner directly with fund managers or institutional investors such as pension funds, added Bradley-Ward.
Ablrate is a secured business lender that finances small business capital equipment, marine assets and aircraft. Bradley-Ward launched the platform when he saw potential in the inefficiencies of the traditional aircraft financing market.
For illiquid investments, providing a strong and liquid secondary market is key, Bradley-Ward told PDI in March, which is why the firm has spent so much time on getting its trading platform off the ground. It has handled 600 trades in its first month of operation.
“The new secondary market is a culmination of feedback from investors and our experience trading in other markets, such as commodities and bonds, where a two-way market is essential. Any market can only be successful if there is liquidity, and that is never guaranteed, but we feel that the way we have structured the secondary market and the accuracy of the calculations, will make it an attractive addition to the Ablrate platform,” said Bradley-Ward.
The Ablrate secondary market has also solved problems experienced on some other marketplace lending trading platforms. Sellers can discount the assets if it is distressed or if they want to ensure a quick sale.
Andy Sweeney, Ablrate’s head of fixed income, said the system also builds in an equitable interest calculation so that an asset seller does not lose out on interest due for the period they held it, but which is paid after they sell it on. Some other systems do not pay interest on loans put up for sale so the original holder loses out on a portion of the return, he added.
Ablrate is based in the UK and is set to open an office in Singapore. Bradley-Ward was an engineer in the Royal Air Force before moving into corporate finance. Sweeney previously worked in bond syndication at RBC Capital Markets and Mizuho.