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.
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.
