Equity-based crowdfunding platform VentureCrowd has launched a new investment opportunity for its registered wholesale investors, giving them access to blue chip corporate bonds for the Artesian Australian Corporate Fund. Access to these bonds are given at the same level as institutional investors to help smaller time investors diversify their portfolios.
VentureCrowd is using the same philosophy it has used with startups and property, meaning that this new service will be eligible for investors to invest as little as $25,000 and still receive the same fee structure and conditions as those investing $5 million or more.
“We wanted to offer a unique, alternative, boutique credit fund to investors accessing investments and diversification that would not normally be available to individual investors,” said Rob Nankivell, VentureCrowd CEO.
“Our investors need a pool of liquid assets they can draw upon when high-return alternative investment opportunities arise, like startups and property. We see the credit portfolio as a potential way to generate regular income at the same level and fee structure as institutions. VentureCrowd has significantly lowered the barriers to entry, allowing eligible investors to truly diversify their portfolio on the platform.”
By making available the Artesian Australian Corporate Fund to VentureCrowd’s members, investors will gain exposure to high-return, high-growth startups, major property developments and blue chip corporates.
The Fund offers investors opportunities in a diversified fund holding Australian dollar corporate bonds that are professionally managed by Artesian. With Australian interest rates at all time lows, floating rate note securities offer fixed income investors opportunities to take advantage of rising rates when interest rates bottom out and begin to rise. Although the Fund will also invest in fixed rate securities, more emphasis will be placed on FRNs to mitigate interest risk rate.
For over 10 years Artesian has managed fixed income funds, with each partner of the business having more than 20 years experience in Australian fixed income markets. The Fund will aim to achieve returns above the RBA cash rate (+1.75% to 2.75%) by leveraging Artesian’s network of employees and relationships.
The Fund is aimed at wholesale investors who have an income of more than $250,000 per annum over the previous two years, or have net assets of more than $2.5 million. VentureCrowd qualifies those investors to ensure they are eligible.
Unlike typical corporate bond funds that require minimum investments in the six or seven figures, VentureCrowd allows any single eligible wholesale investor to invest $25,000 or more, targeting the crowdfunding platforms members who are typically VCs or Angels investing in startups and high-growth companies.
Artesian Managing partner Matt Clunies-Ross says the corporate bond market has historically been inaccessible to individual investors as it has involved high costs to invest and settle with significant amounts of management fees and brokerage.
“We looked to create a corporate bond fund that gives Australians the potential opportunity to earn regular income from exposure to a diversified portfolio of blue chip Australian companies. We’ve lowered the barrier to entry for investors,” he said.
VentureCrowd has a proven track record in crowdfunding and has led a number of successful raises since its launch in late 2013, including raises for ingogo, Hey You and CrowdMobile. Together the three startups have raised investment from a range of $500,000 in a seed round to a $4.2 million raise, which was part of a $12 million Series C round for ingogo.
VentureCrowd is now aggregating demand from potential investors for the Fund to radically lower the barriers for investment for individual wholesale investors to give them access to opportunities traditionally reserved for institutional investors. The Fund will also allow wholesale investors to to retain individual control over portfolio construction.
This is the first corporate fund offering from VentureCrowd, which has to date built more than $14 million in funding for startups and high-growth companies. With the addition of property, credit and debt offerings, VentureCrowd has now become a multi-asset class online investment platform.
Image: Jeremy Colless. Source: Supplied.