London-based asset manager Omada Capital has launched a lending service based on “the broadest range of listed shares,” according to a statement on Monday.
The launch follows the trial of the service over the last five months to selected clients, with roughly £35 million ($57.9 million; £42.3 million) of loans disbursed backed by £55 million of share collateral.
Omada will provide loans through the backing of a Canadian asset managemer with around £6 billion of assets it manages for clients including local city pension funds, family offices and alternative funds. The name of the backer was undisclosed.
The new service will include bonds as well as equities and be rolled out to a wide client base over the next 12 months with a new business target volume of between £250 million to £270 million.
High net worth individuals, family offices and private wealth managers are expected to account for more than 50 percent of the borrowers with treasurers at emerging markets and growth businesses making up the rest.
Omada offers 45-75 percent LTVs depending on the company's market capitalisation and stock liquidity, and there are “few restriction on the type of listed equities accepted as collateral,” the firm said. The minimum term loan is usually three years and clients have full discretion to use funds as they see fit including buying property or funding their business.
“If the value of the collateral bonds or shares falls below the loan value, the client has the option of either topping up the value of the collateral, or walking away and assigning outright the collateral backing the laon to Omada,” the firm said.
Peter Hellman, co-chief executive of Omada Capital, commented: “We are delighted to launch what we believe to be the market’s most straightforward and flexible stock-based lending service. Lending on stocks is an important funding channel and a potential source of additional returns for family offices, hedge funds and other bond and share-based investment businesses as well as for many businesses and SMEs.”
Shahram Shoraka, co-chief executive of Omada Capital, added: “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.”