Kilde’s Fountain of Finance #19 - 29 Nov

In this edition of the newsletter, we highlighted industry reports on wealth management trends from EY and the sustained growth of private debt as outlined by Guggenheim Investments.

We also explored industry chatter about the critique of Gen Z and Millenial investors investing in collectibles and the increased media coverage of the growth of private credit, as reported by Bloomberg News.

Lastly, we've dedicated a section to Kilde News, where we share our performance updates, the events we've participated in, and the partners we're collaborating with to bring private credit deals to the Kilde platform.

We hope you have a great read!

Industry Intel: Our Favorite Industry Report Roundups

Rethinking how to win in wealth management: A deep dive into key industry challenges and proven concepts to overcome them

• EY's 2024 Global Wealth Management Industry Report explores the pivotal question facing wealth management leaders today: how to achieve growth, profitability, and sustainable competitive advantage.?
• The report identifies ten underlying challenges that wealth managers must master to outperform, including personalisation at scale, elevating relationship management, scalable client-centric advice, modular offerings that create synergies, redefining the relationship manager role, achieving organic growth outperformance, overcoming operational complexity, building future-proof technology and data infrastructure, delivering seamless omnichannel experiences, and redesigning essential control functions. The report's value lies in the 20 proven business and operating model concepts that address these challenges.?
• EY examines four key concepts: advice-centred affluent banking, client-centric wealth advice, intergenerational wealth transition, and strategic use of AI. The message is clear: Firms that adapt their models, embrace these concepts, and focus relentlessly on increasing client-perceived value will shape the future of the wealth management industry.

Link to report: https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/wealth-and-asset-management/ey-gl-global-wealth-mgmt-industry-report-04-2024.pdf

Private Debt Continues to Shine Amid Economic Strife

Private debt has been a bright spot in uncertain markets, providing compelling returns and attracting increasing investor interest. Here are five key reasons why:

1. Higher risk-adjusted returns: Private debt aims to deliver enhanced yield through the illiquidity premium. Historically, it offered 100-500+ basis points of additional yield compared to public credit markets.
2. Floating rates: Most private debt is issued at floating rates, which provide some protection against rising interest rates and inflation.
3. Expanding opportunity set: As the private debt market has grown to over $1.7 trillion, managers can now pursue more significant deals that were previously inaccessible.
4. Stronger protections: Direct origination allows for better negotiation of structural protections and covenants compared to broadly syndicated loans.
5. Diverse strategies: From senior debt to mezzanine, private debt offers exposure across the risk-return spectrum to match different investor objectives

Navigating this market is complex, and the keys to success lie in disciplined sourcing, rigorous underwriting, and active monitoring by experienced managers. At Kilde, we focus on a single sub-class of private debt: senior loans backed by cash-generating assets such as consumer loans or invoice receivables in emerging markets.

As banks pull back amid volatility, private debt funds are well-positioned to fill the gap and capture attractive opportunities in the upper middle market. The asset class is indeed coming of age.

Link to report: https://www.guggenheiminvestments.com/institutional/strategies/alternatives/private-debt-strategy

Latest scoop on Private Credit Investing

Wake-Up Call for Millennial and Gen Z Investors!

• Chasing collectibles like watches and sneakers instead of stocks and bonds could be a costly mistake in the long run.
• A recent Bank of America survey found that 94% of wealthy millennial and Gen Z investors are looking to invest in collectibles, with many already doing so. The perception is that traditional assets like stocks and bonds don't pay enough.
• But here's the hard truth: collectibles simply can't match the long-term wealth-building power of a balanced stock and bond portfolio. While the occasional Rolex or rare pair of Jordans might skyrocket in value, these cases are more often the exception than the rule.
• Over time, a diversified mix of equities and fixed income has proven the most reliable path to investment success. Refrain from letting the allure of the next hot collectibles distract from building genuine, lasting wealth.
• Millennials and Gen Z have time, but they need more time to invest in risky alternative investments to avoid missing out on the incredible compounding power of traditional assets held patiently over decades.

Reference:https://www.bloomberg.com/opinion/articles/2024-07-15/gen-z-millennials-will-find-alternative-investing-costs-them-dearly

The Rise of Private Credit: Opportunities and Growth Ahead

Private credit is gaining momentum as banks strive to regain market share and competition for capital intensifies. Despite these challenges, investor demand remains robust as the private credit landscape expands beyond corporate lending.

The growth of private markets has been remarkable in recent years, with more expansion on the horizon:

• Direct lending to middle-market companies is projected to exceed $2 trillion by 2027.
• The $6.3 trillion consumer-oriented asset-based finance market supports financing for property, cars, credit cards, and small business loans.
• Private capital increasingly funds renewable energy and clean technology projects.

Investors are turning to private credit to enhance portfolio returns, particularly compared to public credit. However, success depends on partnering with experienced lenders who effectively manage risks and borrower relationships in this rapidly evolving market.

Private credit may offer solutions for navigating a macro environment marked by higher inflation and lower real growth. The illiquidity premium and inflation hedge many private credit structures provide could become even more attractive.

As private credit plays a critical role in financing the global economy, investors have a unique opportunity to diversify their portfolios and gain exposure to the real economy.

Kilde News

Our AUM has reached $74,111,225 while keeping annual net returns at 12.56% and losses at 0.0%, thanks to our community of investors and partners coming onto our platform.?

Want to learn more about the statistics behind Kilde’s performance? Head on to this site: https://www.kilde.sg/statistics

Radek Jezbera attended this year’s 5th Annual Asia Pacific Microfinance Forum, organised by the Uniglobal team. He shared some exciting insights around investors' perspectives on funding microfinance institutions. Want a copy? Send us a message at [email protected]

Sip and Connect 3rd Edition: Thank you to all our investors who attended the event. It was great seeing everyone and learning more about how we can better serve our community of investors. Photos: https://www.dhirubhai.net/feed/update/urn:li:activity:7264859112943869952

Currently, six partners have live offerings and four upcoming partners are preparing to launch new deals or return with fresh opportunities. Here’s a snapshot of the partners:?

Live Partners that already have deals on Kilde

• Monedo Financial Services : Mumbai-based NBFC providing AI-driven consumer and MSME loans across 120 cities.?
• Creditstar Group : International consumer finance company operating in 8 European countries. (We interviewed Valter Kaleta , Board Member and previously Chief Business Development Officer at Creditstar Group, who has been with the company for over 12 years. Here’s what he has to say about the company and its ambitions: Interview with Creditstar Group)
• Iute Group : Estonian firm offering loans, credit cards, and shop financing across Europe and the Balkans. ( Tarmo Sild dives into why Iute Group is an incredible company with an exciting future. Learn more to find out: Fixed Income Focus: Exclusive Interview with Tarmo Sild, CEO of Iute Group (Part 1))
• ID Finance : Barcelona-based fintech serving millions with AI-powered credit solutions.?
• Bichil Globus: Mongolian NBFI offering diverse secured loans across 16 branches.?
• Sendly NBFI JSC : Mongolia’s sole NBFI providing both domestic and international remittance services. (Naranbat Battulga explains why Sendly is primed for future success as it prepares for international expansion, as discussed in this interview: Exclusive Insights from Sendly's Founder: Investing in Mongolia’s Leading NBFI)

Upcoming Partners are launching new deals or returning with fresh opportunities.

• Fluid : Singapore-based B2B payment platform. (We interviewed Ruoyun Yang, CFA ,Co-Founder and CFO of Fluid to learn more about Fluid and its vision in APAC. Learn more here: B2B Financing in Singapore - Interview with Ruoyun Yang, CFO and Co-Founder of Fluid)
• Jetfinance: Auto-lending player from Kazakhstan?
• Pulman: Top microfinance provider in Uzbekistan?
• Rerum: Czech consumer loans provider

About Kilde’s Fountain of Finance

Our editorial team at Kilde curates valuable insights into the private credit space to keep you updated on exciting developments. Subscribe now for free and stay informed!

About Kilde

Kilde is an investment platform tailored for individuals and institutions, providing access to private credit deals supported by cash-generating assets. We offer up to 13.5% annual returns to our investors, surpassing similar risk investments yielding around 8%. We are licensed by the Monetary Authority of Singapore. Find out more:https://www.kilde.sg/