Money Managers managing director Doug Somers-Edgar says although there are many finance companies around, it’s often hard to work out their structure and the risks involved in each offering.
He says Orange will be transparent with a clean structure.
“Many investment advisory firms recommend only products developed by other companies, which they have only limited information about and no influence over,” he says.
Orange will only be distributed by Money Managers advisers, therefore becoming a useful tool to find new clients.
Somers-Edgar says an investment with Orange Finance is a deposit secured by a first priority floating charge across all of the company’s assets, mostly loans, ahead of the shareholders and unsecured creditors. There is only a very limited ability for a prior ranking security interest – a maximum of 2% of Orange Finance’s total tangible assets.
Orange Finance has a capital adequacy ratio of 7.5%. (For every $1 million of capital, investors can contribute $13.3 million before more capital is required).
Lending is run by a company called Matrix Funding Group.
Somers-Edgar says most of the lending will be in the property area, however the company won’t have a big exposure to development properties.
Orange Finance will not lend to Money Managers’ First Step series of tax-effective fixed interest funds, and Orange “will not generally” lend to companies or trusts associated with Money Managers. Only limited funds may be lent to other related parties (approximately 5% of total tangible assets, maximum).
Somers-Edgar says Orange is expected to raise about $200 million over the next two years.
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