Australia’s first managed fund that invests solely in peer-to-peer lending has been launched, offering access to high yields and low volatility the asset class can provide for sophisticated SMSF investors and high net worth investors.
Speaking at a media briefing in Sydney last week, Global Credit Investments (GCI) chairman and co-founder Steven Sher said the aim of the fund was to provide steady, reliable income coupled with lower volatility than many existing fixed income products.
“This is not a get-rich-quick product – we are trying to get a set return at the lowest possible risk we can,” Sher said.
“The lack of volatility in consumer credit is really what attracted us to the asset class, and with baby boomers getting older and wanting yield without risk, the fund really started to make sense.”
GCI co-founder Gavin Solsky added that with traditional defensive investments becoming increasingly unviable as a source of returns, it made sense the fixed income sector would continue to be disrupted.
“Australian savers have historically put their money in term deposits as a ‘no brainer’, but interest rate reductions are going to continue to impact those investors,” Solsky said.
“At the same time, new technology around risk-based pricing is facilitating access to investments that have previously only been available to the banks, such as unsecured personal credit and small business finance.”
While the fund’s portfolio was currently focused on personal loans to the top 10 per cent of United States income earners, it would look at Australian opportunities as the local lending market continued to evolve through the likes of fintech firms Ratesetter and SocietyOne, GCI investment director Jacob Rosenberg noted.
Sher said his organisation was keen on attracting fund flows from SMSFs.
“Some of the private wealth managers who are looking after people’s wealth including SMSFs are very attracted to this offering,” he said.
The minimum investment level for the fund is currently $100,000.
