The Swiss fintech company i2 group has developed software to facilitate private debt strategies for asset managers. It is already used to increase transparency in five different investment products.
Who uses i2 group’s software and why?
More and more asset managers are looking at the private debt markets and especially the alternative lending space. Loans originated by online lending platforms offer stable returns and low correlation with more traditional financial instruments. We basically help asset managers to create investment products in this space and let them implement attractive new strategies for their clients quickly.
Investment funds are nothing new. What point does i2 group address?
Managing a large portfolio of loans is a major headache for asset managers. Using Excel sheets to track them is very inefficient and prone to errors. It is also a dull and boring job. In times of scarcity of workers' resources, these are better spent on the analysis of data rather than in its preparation. Our software gives real-time information aggregated but also drill-down to single-loan level instead, accessing borrower information from loan originators and bank accounts once or twice a day. It crunches the numbers and standardizes the data. But it transforms not just operations, it gives asset managers unprecedented transparency - they can use it as a marketing tool and show their clients that the real-time insights they get into their loan portfolios are the best way to ensure secure and stable returns.
Most traditional investors still think about different types of bonds in their portfolios.
We benefit from a strong tailwind as the topic of private debt is booming. Family offices are already heavily involved in this type of fixed-income strategy, and more mainstream investors will follow. The big asset managers are already building up their capacities. Pictet Asset Management recently announced that they put together a four-person private debt team. If you’re a smaller or mid-sized asset manager and don’t have the same capacity to invest in your own team, you can, of course, just distribute funds among the big providers. But with our expertise in these markets and the help of our software, you can also start building your own products under your own brand, products that are tailored to the needs of your clients. Asset management is under increasing pressure, and we see a trend that asset managers want to have their own labeled offer in the private debt space today. If you have, say, 10 million Francs or more to allocate in this space, you need to see i2 group’s software. It takes only a few minutes to understand how it can contribute to convincing clients. This market will be huge in a few years.
Is your software already used by paying clients?
We have clearly demonstrated our proof of market and clients' willingness to work with us.
In total, five investment products are already managed with our software. Accuro Fund Solutions in Liechtenstein has lending funds up and running, they invest in the real economy, in loans for small and medium enterprises across Europe, and are very broadly diversified. NSF Wealth Management has launched a Swiss SME Lending Fund in 2021, and in 2022, Blackfort Investment Partners launched their Swiss Real Estate Debt Fund that allows investors to invest in the Swiss real estate market in an innovative way. We’re happy to say that we also managed to achieve positive returns with managed accounts this year.
Active since 2017, i2 group has established itself as an enabling technology for asset managers in the private debt space. How is the company evolving?
In terms of new products launched, Blackfort's new fund has certainly attracted a lot of interest because of its novelty. We have also established a partnership with another fintech, Crowd4Cash in order to finance car loans originated by the car subscription platform Carify. Those loans will be financed by NSF’s fund. It is a very good example of how we can quickly establish working relationships with other players in the market to provide new products. As a company, we grew moderately to about a dozen full-time employees, and we’re happy that Helge Meichsner joined us as Head of Finance. Her experience in financial positions in the startup ecosystem is of great benefit to us. Finally, we raised CHF 3.8 million in an oversubscribed financing round and strengthened our board with financial expert Philipp Schnyder. He has been with Partners Group almost from the beginning and with his network and experience he is a valuable asset for our company.
