Bridge is the world’s first fund finance marketplace and has announced its launch to market. The cloud-based platform allows alternative investment funds to arrange capital call facilities in real-time. This makes significant savings to cost and time. Pillar banks, alternative lenders and some of the most recognisable alternative investment funds are expected to become early adopters.
Each year, UK funds raise around £125bn in capital call facilities. Despite consistently strong growth in the number of GPs seeking capital call facilities and a near 200% recent increase in the number of lenders, the system for raising capital call facilities lacks efficiencies seen in other markets. Fund managers are required to manage quotes for lenders individually, with it often taking weeks to receive term sheets. Lenders, meanwhile, can be capital-constrained, have the potential to change appetite rapidly, and can struggle to deploy capital cost-effectively.
Founded by Andrew Frazer Smith, a former director at NatWest Group, Bridge’s platform promises it is easy to use and highly secure. Borrowers and lenders input their borrowing requests and lending appetites which are instantly matched and placed into a live single-view environment. Borrowers can then manage the bid process on one screen, and all included parties can communicate and refine terms directly to arrange either bilateral or club deals. Via its bespoke ‘timescale’ milestones, Bridge ensures alignment of expectations and progress to stay on schedule through to draw down.
“Bridge is the updated marketplace that we have needed for some time”
Smith said: “For all the growth in capital call facility volumes and values, funds and lenders are still forced to rely on costly and inefficient analogue processes, whether managed themselves or outsourced to third parties. Such an approach imposes significant time and financial costs, which are ultimately being worn by those working to build pension pots or invest in the UK.
“Bridge is the updated marketplace that we have needed for some time. It cuts the time and costs associated with arranging fund finance significantly, whilst providing the data needed to support effective portfolio management. One benefit of that is increased market accessibility. We could see more borrowers and, crucially, more new lenders; perhaps most likely in the form of institutional capital with a variety of appetites.
“The demand from GPs and ‘borrower side’ firms is huge. As a marketplace, our customers are on both sides of a deal. We have worked hard to ensure the platform is attractive to fund financiers. Demand is strong and we have a number of the key lenders in the market lined up including pillar banks and alternative fund financiers. On the basis of the conversations we’ve been having with major funds and fund finance institutions, it is becoming increasingly clear that lenders not using this marketplace will be left behind.”
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