Omada Capita has launched a stock-based lending service, which allows clients to secure loans against the broadest range of listed shares and on flexible market terms.
The launch follows a trial of the service with selected clients over the past five months, with some GBP35m of loans disbursed backed by some GBP55m of share collateral.
The service is now being officially launched and will include bonds as well as equities and be rolled out to a much wider potential client base.
Omada is looking to significantly increase the scale of its stock-based lending service, with a new business target volume of between GBP250m and GBP270m over the next 12 months. The company expects HNWIs, family offices and private wealth managers to account for a significant more than 50 per cent of the borrowers with treasurers at emerging markets and growth businesses making up the balance.
Omada offers a 45 to 75 per cent loan to value depending on market capitalisation and liquidity of the stock and has few restrictions on the type of listed equities accepted as collateral. So far it has accepted shares listed on exchanges as diverse as the Philippines, Turkey, Israel, AIM, Nasdaq, India, as well as global depository receipts.
The minimum term of the loan is usually 36 months and clients are not restricted to using the funds to invest in financial assets and indeed have full discretion to use the money as they see fit, for instance buying property or funding their businesses.
Omada provides the loans through the backing of a Canadian asset management firm with around GBP6bn equivalent of assets, which it manages for a broad range of clients, including local city pension funds, family offices and alternatives funds.
Peter Hellman, co-CEO of Omada Capital, says: “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 a potential source of additional returns for family offices, traditional fund management and hedge fund groups and other bond and share based investment businesses. As such it helps to promote economic activity and we are pleased to play a role in helping to spur economic growth and accelerate the recovery.”