A pooled investment fund targeting high income returns from prime credit sourced by marketplace lending has opened to high-net-worth and institutional investors.
Global Credit Investments’ (GCI) Diversified Income Fund invests in prime short-term consumer and small business credit.
GCI co-founder and chairman Steven Sher said the fund was established after finding a gap in the market for alternative investable assets that are highly diversified, deliver stable income and uncorrelated to major asset classes, and would remain resilient during periods of market stress.
“Consumer and small business credit has historically been the exclusive domain of banks and financial institutions,” Mr Sher said.
“However, emerging technologies are disrupting traditional banking markets, allowing GCI to now access what we believe is among the best risk/return credit opportunities available to fixed income investors.”
Mr Sher said the speed and magnitude of disintermediation allows the fund to ‘cherry pick’ prime assets from online marketplace originators.
“These assets used to sit directly on a bank’s balance sheet and were previously inaccessible to non-bank investors,” he said.
“Investors in the GCI fund can now access a high return by buying these assets without the additional risk of leverage.”