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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