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Increasing bank regulation is presenting significant opportunities for the alternative credit sector, according to a Sydney-based investment manager.
Announcing this week that it has raised $22.5 million in a latest round of financing for SME lender, OnDeck, Global Credit Investments (GCI) said it sees continued opportunities in the alternative credit sector.
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GCI co-founder and chairman Steven Sher said the financing of OnDeck fits into the firm’s strategy of “delivering great risk return outcomes for investors”.
He added that due to consistent increases in bank regulation as well as improvement in technology and the availability of credit data, GCI continues to see further opportunities in the alternative credit sector.
“We’re finding a vibrant interest in alternative credit investments whereby investors are stepping in to fund Australian small businesses where the banks are not stepping up.”
The financing was completed through a special purpose bankruptcy remote structure with Perpetual as the trustee, while the $22.5 million was raised from Australian high-net-worth individuals and family offices.
“Australian investors are looking beyond shares and real estate as a way to diversify their sources of returns – and as a result, high-net-worth individuals are attracted to new models like OnDeck,” Mr Sher said.
According to GCI, strong investor demand also saw significant oversubscription of the capital raise.
OnDeck Australia is a technology-enabled SME lender that administers on-demand working capital solutions. The $22.5 million sum was raised for OnDeck Australia’s small business loan book.
