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Omni Partners launches third secured lending fund

Wednesday, April 20, 2016
Opalesque Industry Update - Omni Partners LLP, the London-headquartered investment manager, announces the successful launch and first close of its third secured lending fund, Omni Secured Lending Fund III LP. Initial commitments stand at approximately $60 million. OSL III is targeting $400 million of assets.

OSL III provides its underlying investors with exposure to short-term loans secured against UK residential and commercial properties. The strategy enforces strict lending requirements: all loans are asset backed (helping to minimise losses), duration is no more than 24 months and Loan-to-Value (LTV) is capped at 75%. Loans are extended to professional property investors and typically fund the acquisition of buy-to-let properties or fund refurbishment projects. Exit is predominantly achieved by property sale or long-term refinance. Amicus Finance Plc (a subsidiary of Omni Partners) serves as the fund’s origination platform and is responsible for the entire front-to-back loan process.

Omni’s Founder and Head of Risk, Steve Clark, commented: “Private credit should be a compelling part of every institutional investor’s portfolio. We are therefore pleased to see that OSL III’s combination of an unlevered lending strategy delivering attractive yields on assets of superior quality and short tenor is attracting increased interest from institutional investors worldwide.”

Elissa Kluever, Managing Director – Credit/Lending Funds, said: “The launch of the third vintage of Omni Secured Lending marks an important milestone with the first direct allocation by a pension fund to the strategy. OSL has a track record of consistently delivering strong risk-adjusted returns and we look forward to the second close on 1st July. The strength of our pipeline is testament to investors’ continued interest in the strategy.”

The market opportunity for OSL III stems from the tightening of underwriting requirements by traditional banks, resulting in an emphasis on standardised lending criteria and increased loan approval times. In order to deliver attractive risk-adjusted returns, OSL III focuses on the short-term lending market in the UK (estimated at £3.5 billion annually), where alternative lenders are able to obtain interest rate premiums and demand more security in return for speed and certainty of execution.

Omni Secured Lending Fund I launched in February 2014. The fund returned 112% of investors’ original capital in less than 27 months, ahead of schedule. The second vintage of OSL held its final close in February 2016, after raising $240m in total. The second fund has just ended its investment period and is in realisation. Since inception in April 2015, OSL II has delivered a net IRR of 11.5%.

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