Bridgeport to provide liquidity solution for hedge fund investors
Bridgeport Financial Technology is working with various counterparties to provide hedge fund investors with immediate liquidity through loan facilities collateralised by their fund investments.
The company is poised to leverage key features of its private fund transaction and marketplace lending platform, BridgePort, in the wake of an anticipated surge in hedge fund redemption suspensions.
Through a unique investor-to-investor (i2i) marketplace lending feature, the BridgePort Liquidity Exchange (BLX) matches liquidity seekers with liquidity note investors. BLX allows private fund managers to offer alternative liquidity optionality to investors, while avoiding portfolio disruption, asset valuation challenges and "fire sales", or interference with existing fund liquidity terms. Yield-seeking accredited investors can capture attractive risk-adjusted returns through the purchase of i2i notes with terms up to one year, and loan-to-value (LTV) ratios up to 25 per cent.
BLX utilises unique algorithms to assign proprietary collateral ratings based on key fund terms, underlying asset quality and liquidity, historical drawdowns, and additional portfolio metrics to calculate note LTVs and base rate spreads. BridgePort's encrypted SaaS platform streamlines the private fund lending process, while providing private fund constituents with a highly efficient and secure transactional environment. The single-sign-on, fully digitised, agnostic platform accommodates online investor capital transactions, multi-fund reporting, and custom liquidity optionality utilising algorithmic-based portfolio analytics, digital dashboards and a related documentation vault.
"The private fund industry is facing challenges similar in nature to those we saw in 2008, where there will be a wave of redemption suspensions, gates, valuation challenges and liquidity struggles between funds and their investors," says Christopher Nero, founder and CEO of Bridgeport Financial Technology. "BridgePort provides an ideal solution where private fund managers can avoid unnecessary portfolio disruption, fund investors can expedite access to a portion of their capital, and participating note investors can earn attractive risk-adjusted returns. The BridgePort platform allows us to accomplish this in a matter of days, where under even normal market conditions, investors wait multiple months or quarters to gain access to liquidity."