IRELAND’S largest peer-to-peer lender will launch a new residential property fund worth €150m (£134m) within the next three months.
Initiative Ireland – which last year funded the country’s largest ever P2P loan – will act as the investment advisor on a €150m Residential Property Finance Fund alongside Irish wealth manager The Davy Group.
The senior debt fund will specialise in financing residential property developments and aims to fund the construction of more than 2,500 new family homes in high-demand areas across Ireland over the next five years.
The fund is targeting annual returns of between seven and 7.5 per cent, although it will initially be available only to institutional investors and qualified lenders who can invest a minimum of €100,000.
Retail investors will still be able to invest in the underlying loans via the Initiative Ireland platform.
“One of Initiative Ireland’s core objectives is to promote financial inclusion,” said Initiative Ireland chief executive Padraig W. Rushe (pictured, left).
“As such, investors who cannot commit the required amount for the fund will still be able to open Private Lending Accounts or Corporate Lending Accounts with InitiativeIreland.ie to access the underlying secured asset class, directly lending alongside the fund at smaller amounts.
“For financial services to remain relevant, we must embrace innovation, but that innovation must come from a place of understanding,” added Rushe. “Often that isn’t the case. We’re innovative but conservative. It’s that paradoxical conservatism which really sets us apart in a good way from both traditional finance and other fintech firms.”
Initiative Ireland’s fintech platform has an existing loan pipeline of more than €150m, but Rushe said that he expects the Residential Property Finance Fund to “significantly” increase the platform’s lending capacity.
The fund is set to be structured as a sub-fund of The Davy Platform ICAV umbrella fund structure and that the Davy group will provide regulatory and investment management services to the fund. Initiative Ireland shall provide investment advisory services to the fund in addition to loan management services.
Abbey International Finance has already pledged an investment of €20m in the fund.