Omni Partners Raises $240M For Second Secured Lending Fund

Category: Short-term Lending Published: Monday, 29 February 2016 Written by Super User

Omni Partners has held the final close of its second secured lending fund with total commitments of $240 million. 

The new fund, Omni Secured Lending Fund II LP, added additional commitments of $34 million following a soft close, leaving assets raised at $240 million. The final tally was first announced on February 1. 

As with its 2014-vintage predecessor fund, the second Omni secured lending fund provides investors with exposure to short-term loans secured against residential and commercial properties in the United Kingdom. 

The fund's lending requirements are strict, according to Omni. Loans, which vary in duration from 6 to 18 months, are asset-backed and carry maximum LTV ratios of 70%. Moreover, they are extended to professional property investors and typically support the acquisition of buy-to-let properties or refurbishment projects.

Exits are predominantly achieved by the borrower securing long-term financing or selling the property, said the firm. 

In order to deliver risk-adjusted returns, OSL II focuses on the short-term lending market where alternative lenders can obtain interest rate premiums and demand more security in return for speed and certainty of execution.

The alternative lending space has exploded since the 2008 financial crisis, with an increasing amount of expertise and capital entering the space in just the last two years. Driven by regulatory changes and tighter capital risk requirements that have led large banks to largely recede from lending to small- and medium-sized issuers, hedge funds and other alternative lenders have stepped up to fill the credit vacuum. 

"The $240 million of investment we have raised for the second vintage of Omni Secured Lending is proof of investors' continued interest in an unlevered lending strategy delivering attractive yields on assets of superior quality and short tenor," said Omni founder Steve Clark in a statement. 

In light of the institutional demand for direct lending alternatives, Omni is planning to launch a third Omni Secured Lending fund in April of 2016, added Clark. 

Founded in 2004, London-based Omni Partners manages approximately $972 million in assets across four strategies, including macro, event-driven, long/short equity, and secured lending.

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