Omada Capital, a UK-based investment firm, has launched a new stock-based lending service that allows clients to secure loans against a wide range of shares and bonds.
The launch follows a five-month trial period that provided £35 million of loans, backed by around £55 million of share collateral.
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Additionally, the company is planning to expand its service over the next 12 months by targeting new business of between £250 million to £270 million.
Omada Capital said that it expects HNWIs, family offices and private wealth managers to account for more than 50% of the borrowers.
However, small and medium-sized enterprises and growth companies will account for around 25-30% of the business with treasurers at emerging markets and growth businesses making up the balance.
The firm will provide a 45 to 75% loan based on market capitalisation and liquidity of the stock and has few limitations on the type of listed equities accepted as collateral.
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By GlobalDataOmada will offer the loans through the support of a Canadian asset management firm with around £6 billion of assets.
The minimum term of the loan is 36 months and there are no restrictions for clients on using the money, for example buying property or funding their businesses.
Peter Hellman, co-CEO of Omada Capital, said: "Lending on stocks is a potential source of additional returns for family offices, traditional fund management and hedge fund groups and other bond and share based investment businesses."
