A Singapore-based family office is investing $34 million in an absolute return fund run by a fintech that offers a crowdfunding loan platform for small to medium enterprises.
CoAssets is headquartered in Singapore and listed on the ASX (CA8) with a current market cap of about $20 million. It has funded $45 million to 400,000 users in Asia since its launch five years ago.
In July the company launched the CoAssets Stirling Fort Absolute Return Fund (CASFAR). The fund extends bridging loans to SMEs who must either pledge a hard asset as collateral or allow the fund to have a charge over earnings and contracts receivables.
The loans run for 12 months or less. The fund says the collateralised nature of its debt makes the fund unlikely to be affected by equities or interest rates markets.
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In an announcement made on Friday, Singapore family office BMFA Group has committed to invest $34 million in this fund.
BMFA Group offers wealth management, estate planning, insurance, and capital funding and commercial loans to high-net-worth (HNW) executives, professionals and entrepreneurs in south-east Asia. It is an independent financial advisory company and was incorporated this year.
The investment takes the fund's assets under management to $40 million. At the time of its launch in July, the CoAsset said it expects to raise $101 million over the next five years.
BFMA will invest in 11 tranches of at least $2.75 million up to October 2019.
CoAssets co-founder and chief executive Getty Goh said: "We are extremely humbled that BMFA Group has decided to invest on CASFAR. The US$25 million investment will allow us to invest in high yielding securitised deals that will generate good returns for our investors and the company."
"With this investment, the total AUM for CASFAR will be about $ 40 million - this is a very good start, considering that the fund was only launched two months ago. On the back of this, the team believes they will be able to build on this momentum to bring CASFAR as well as CoAssets to greater heights," he said.
CA8 one year returns were down 67.5% as compared to the ASX 200 on September 21, according to Market Index.