1741 Fund Management and global SME marketplace lender Bitbond today announced the launch of a new Alternative Investment Fund (AIF). The fund gives professional investors access to the performance of a diversified portfolio of small business loans that are originated through the Bitbond SME lending platform.
Direct debt investments into SME loans and other types of B2B debt financing are becoming an increasingly popular asset class. Since such assets usually have amounts approximately in the €1,000 to €200,000 range, institutional investors need to set up structures which make these assets investable for them.
1741 Fund Management set up an open-ended investment fund incorporated in Liechtenstein as a SICAV (société d'investissement à capital variable), to make investing into SME loans via Bitbond accessible to any kind of institutional investor. The product is an Alternative Investment Fund (AIF) under the Alternative Investment Fund Managers Directive (AIFMD) of the European Union, the highest level of regulation for alternative investments in the EU.
Over 2,300 loans worth €6 million were originated through Bitbond since its launch in 2013. 130,000 users from 120 countries registered with the service to date. Most of the loans are used for short-term working capital financing of online retailers who run shops on e-commerce marketplaces like eBay, Amazon or Etsy.
In October 2016 Bitbond received their own regulatory licence by German financial services supervisor BaFin. Bitbond uses blockchain technology for payment processing and is one of the few fully regulated and licensed blockchain based financial services providers.