1,000 Million “Thank You’s” for a $1B Business

Sydney, 1 December, 2022 – Zagga, the boutique investment manager and non-bank lender, has surpassed the $1 billion originations milestone with record originations growth in excess of 40% on the prior year, while continuing to see increases in both borrower demand for non-bank lending and investor appetite for commercial real estate debt.

Alan Greenstein, CEO and Co-Founder of Zagga, said: “We are enormously proud of this achievement and sincerely thankful to the borrowers, investors, introducers and professional teams, who have helped us achieve this milestone. We have demonstrated our ability to fund quality transactions to creditworthy borrowers whilst delivering meaningful, annuitised returns to our investors.”

In five years since inception, Zagga has maintained average investor returns of over 8% per annum, and has grown its investor base to over 400, including Japan’s Crowdbank which in November 2020 entered into an exclusive $50M funding deal with Zagga. 

Other key developments that have supported achievement of this milestone include:

  • consistently building out the Zagga team to include deep subject matter expertise across all facets of the business
  • launch of a second fund, the Zagga Wealth Fund, in February 2021 in response to growing demand from wholesale investors, including SMSFs, for a competitive and secured fixed-income style of return as an alternative to their bank deposits
  • launch of first FIIG-arranged Corporate Note issue, in November 2021 for A$30 million, and a further tap issue for an additional A$13 million in February 2022, demonstrating Zagga’s ability to conform to ‘securitisation’-type protocols
  • despite challenging conditions, consistently accessing investor capital, across a range of sectors, to grow its investment loan activities
  • never compromising on credit quality and transparency in seeking out, approving and delivering CRED opportunities to our investors
  • successfully returning all investor capital and interest across discharged loans.

Mr Greenstein added: “When we wrote our first loan in 2017, we knew the opportunity existed to compete against traditional lending platforms with new technology, a focus on speed of service and a bespoke approach. Who would have anticipated a billion dollars across more than 200 loans?

We have demonstrated our market knowledge, resilience, expertise, commerciality, and above all, our integrity. These factors have allowed us to carve out a niche in the non-bank lending space, and more so, to grow our brand, business and traction in what has been a very challenging market, certainly in the period since the start of COVID-19.”

The growing acceptance and popularity of alternative lending is evident across a range of Zagga’s metrics, with the number of loans originated through the platform over the last two years increasing by more than 200% on the prior three years since inception.  Zagga anticipates another record month for December 2022, including its largest loan to date of $35 million, with a strong pipeline in place for the start of 2023.

In a recent White Paper released by Zagga, the group noted, in connection with the current inflationary conditions, that while Australia is not immune from the challenges facing economies around the world, CRED is an increasingly popular way to provide investors with opportunities to benefit from its non-correlated risk and return profile. This suggests that the CRED asset class may be a potential safe harbour amid a global inflation storm, particularly for those investors seeking high-quality, fixed-income investment alternatives.

The challenge” says Greenstein, “is to continually access larger capital pools to facilitate the growth of the business. We have never advertised for a borrower or investor. Our business is built on word of mouth and trusted relationships. As more borrowers seek us out, we must respond. Our investors have been beyond fantastic and are largely responsible for getting us to this point. The next billion and beyond needs even more effort on our part to build our funding capacity.

We are firmly focused on two key goals: funding our growth and delivering secured, reliable, transparent returns to our investors.”

This article is for information purposes only. It does not take into account your objectives, financial situation or needs. Any opinion expressed in this article are of the author and is subject to change without notice. Readers are reminded to exercise caution and use their own judgment when interpreting and applying the information contained in this article.

Stay Connected

Private credit improves SMSF portfolios

SMSF investors can access private credit opportunities through the Zagga CRED fund, which is a unitised version of the Zagga Feeder Fund. The underlying investments for the offering are high-quality, mortgaged-secured loans in the commercial real estate sector.

Unemployment rises and the economy remains weak

Markets are volatile. Weak economic conditions and falling inflation has rekindled expectations of interest rates cuts in Australia and much of the industrialised world in coming months… The next readings on inflation and unemployment will be critical in the timing of those cuts.

Why the capital stack is vital in commercial real estate

Debt is one of the most fundamental layers of the commercial real estate capital stack. Explore the nuances of the different layers of debt and equity to understand the important role of debt in the overall capital stack.