INTERVIEW
Q
How did the idea of Minterest come about?
Charis: I was with an international bank for 13 years, including a two-year stint in China. During my time at the bank, I was in relationship management, corporate governance, and structured finance. I was exposed to the various facets of how a bank runs its operations globally, and this experience has proven to be valuable during my time at Minterest. After banking, I was involved in private fundraising activities for SMEs.
I started Minterest in 2016 with my partners because I saw a large gap in the SME financing market. This arose after the 2008 Global Financial Crisis, as banks had to continuously reduce their exposure to assets that required more risk capital allocation, i. e. SME loans on their books. However, SMEs are the workhorses of the Singapore economy. They contribute almost half of our GDP and employ about 65 % of our workforce.
In May this year, ARA took a strategic stake in us. With its strong track record in real estate, we were able to work together to unlock institutional-grade real estate investment opportunities for our retail investors, along with the opportunity to invest in corporate loans and invoice financing transactions.
Q
How does crowdfunding through platforms such as Minterest revolutionise real estate investment?
Charis: With data-driven models and lower operating costs, crowdfunding platforms provide opportunities to access a pool of curated real estate investment opportunities directly. We are talking about investors who can invest any time of the day, 24 / 7. This enhances investors’ portfolio diversification across geographies and asset classes while delivering higher riskadjusted returns.
Through the Minterest platform, we democratise real estate investments which have primarily only been accessible by institutional investors and now made available to a whole universe of investors. As much as 87 % of our deals are funded within a day.
Beyond real estate investing, we are also creating a costefficient platform for capital raising. With the platform, we can bridge previously untapped streams of capital with businesses or investments that would have otherwise typically opted for traditional funding vehicles.
Minterest Team Members
Q
What are the risks and benefits associated with crowdfunding for real estate?
Charis: Crowdfunding makes real estate investing easier and more accessible. The benefits are, firstly, diversification away from traditional investments like stocks and bonds where yields may be compressed currently. Real estate returns generally don’ t move in tandem with the equity market and are likely to be less susceptible to short-term market volatility. In addition, there is also the benefit of geographical diversification as real estate crowdfunding gives investors the opportunity invest in different markets.
Secondly, the platform allows bite-sized dollar investments. Our platform allows investors to participate in deals for as little as S $ 2,000. Ultimately, it is about providing more options for investors. Investors can choose between lower-risk, lowerreward debt offerings or higher- upside, higher-risk equity deals.
Any investment carries risk. Perhaps one of the most cited problems with online real estate crowdfunding is that it is deemed to carry a higher risk, given some bad publicity in the past. So, anyone who wishes to invest in real estate crowdfunding must perform their due diligence and research the companies with which they partner. The viability and profitability of the investment rely on the sponsor and the management team’ s ability to run the asset well. Besides that, investors should also check the platform itself. Every platform has a different process for vetting the deals. It is imperative to know how the crowdfunding platform performs its due diligence on the sponsor.
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