Institutional investors target of Omni Partners’ Secured Lending Fund
Omni Partners has launched the Secured Lending Fund I LP, which aims to give institutional investors access to the short term secured property lending market in the UK.
The fund has come about because of a perceived vacuum created by banks drawing back from the short term property lending market in the UK.
The short end of the lending market enables lenders to obtain interest rate premiums, and demand more security in return for making faster lending decisions.
The fund offers a relatively short duration compared with other direct lending products. Funds are used to finance loans with a maximum duration of 18 months, secured against both residential and commercial properties in the UK. Maximum loan to value ratios are set at 70%.
Capital Bridging Finance Limited (CBFL) is acting as the fund’s captive origination platform, and is managing the entire lending process. CBFL provides over seven decades of experience in the property lending market, and in the past four years has underwritten some £100m of aggregate lending across more than 350 discrete loans. Since October 2009 its secured lending portfolio has produced a net compound annual return of 12%, CBFL said, on the basis of pricing for risk rather than making borrowers fit pre-defined rates.
Omni’s Founder and head of Risk, Steve Clark, said: “The key characteristics of this strategy are superior asset quality, short tenor and high yield. In addition, CBFL’s track record is a hard track, delivered on actual capital whilst operating as a stand-alone company unlike the paper track records being peddled by some other new launches within the direct lending space. It is these factors that have been attracting investors to this exciting new strategy.”
The Secured Lending Fund is being made available to institutional investors globally.