SINGAPORE (June 12): Stock loans are nothing new. This form of financing requires borrowers to put up shares as collateral in exchange for a loan. However, the global financial crisis (GFC) in 2008 changed all of that.

On one hand, banks became reluctant to provide stock loans, following the enhance­ment of capital ratio requirements. This elim­inated a popular source of financing for many listed companies. On the other hand, investors found it harder to seek attractive yield gener­ating assets amid the ultra-low interest rate environment after the GFC.

Sensing the gap in the market, Lam Ching Ching — with 25 years of banking experience under her belt — founded Charismatic Capi­tal in 2017. The company provides stock loans to shareholders — many of whom are CEOs and chairmen of listed companies. These stock loans are financed by family offices and high net worth individuals (HNWIs) via a fund structure managed by Charismatic Capital. In return for their funds, family offices and HN­WIs are compensated with attractive yields.

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