Orchard, which operates an online crowdfunding marketplace
for small business owners and others, launched a product on
Tuesday that connects hedge funds, institutional investors, and
others directly to loan originators.
The new offering, called Deals, hopes to give investors
access to a wide range of investments, including secondary
loans and credit facilities, as well as underlying data. Bill
Ullman, Orchards chief commercial officer, says the
product aims to offer banks and other intermediaries better
transparency into deal information as well as a new source of
investments for hedge funds and others.
In the ten years since the financial crisis began to unfold,
banks have pulled back from lending, making private credit one
of the fastest-growing asset classes. But with private deals
hatched between players, information can sometimes be hard to
come by. Ullman points out that one aspect of the offering that
may be appealing to these investors is deal information that is
not readily available on private credit in todays
Although institutional investors have entrenched processes
for getting deal flow, Orchards backers are confident
that the new service will attract big users.
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Investors such as hedge funds have an obligation to
find the best investment ideas. And once theyre on, the
supply side will come on, says Ullman.
Using the service, deal originators may be able to lower
their cost of funding by reaching a larger audience of
potential buyers. Ullman thinks another draw for the platform
will be its data analytics offering. Deals also offers credit
analytics that investors can use to evaluate investments.
Orchards primary venture capital backers are Spark
Capital, Canaan Capital, and Thrive Capital. Strategic
investors include John Mack, former CEO of Morgan Stanley, and
Vikram Pandit, former CEO of Citigroup.