Nick Raphaely discusses the alternate flow of credit on AusBiz TV
Key Interview Talking Points:
Why is credit flow so critical to our economy and what’s creating this kink?
- It’s getting harder for borrowers to do business with the banks – they aren’t flexible or responsive enough in a fast-moving market.
- Timing can make all the difference in this market – developers and investors are frustrated waiting for bank approvals while they bleed money into their projects, or miss out on the deal.
- There is also plenty of capital hungry for yield – it’s not getting much return in cash or bonds.
- Private real estate debt is drawing a lot of investor interest, offering attractive risk-adjusted returns.
How does technology/ your platform help solve this problem?
- Just as Airbnb matches people with an asset (a house or room) with those who need a break, or Uber matches drivers to people needing transport, AltX is also a marketplace platform.
- AltX matches private investor capital with borrowers – matching capital supply with demand.
- Access has always been a challenge for investors – knowing who is credible and who to trust.
- The AltX solution democratises access for wholesale investors.
How does it work?
- The AltX investment platform offers 1st mortgage-backed investment opportunities.
- Investors can hand-select individual deals, or invest in a managed fund for diversification, with a minimum $50,000 investment.
- Investors benefit from borrower guarantees, a registered 1st mortgage, and monthly interest – much the same as how the banks work.
- The product is designed to deliver investors yields of 4.00% p.a. – 8.00% p.a. paid monthly.
How big is this opportunity?
- The non-bank sector has grown substantially and will continue to do so.
- Private lenders are predicted to absorb more than $50 billion in commercial funding needs by 2024.
- The “Big Four’s” share of the commercial real estate market is expected to decline to 65% over the coming years.
- Australia’s private capital market offers one of the most attractive risk/return profiles globally, according to Preqin.
- Institutional investors are focused on the space, as seen by Apollo’s recent investment in MaxCap.
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