Omnia has entered the UK retail investor market with the launch of a new bond proposition – the Omnia Corporate Bond – which will provide the Swiss investment house with an alternative source of finance to fund its investment activities.
Omnia says the bond also creates an opportunity for investors seeking an attractive rate of income, or with an appetite for new investment solutions, to share in an exciting new private equity model, whilst enjoying a highly competitive and fixed rate of return.
Launched by Omnia Bonds plc, a UK-based subsidiary of Omnia Private Equity, the five-year asset-backed bond will pay 8 per cent gross interest per annum over five years, with investors’ capital returned in full on maturity.
Omnia looks to identify companies with the right culture and business model, and which will benefit from its unique approach to value creation; it invests primarily in companies in the SME sector – companies generating EUR1 million to EUR10 million in earnings before interest and tax, which can demonstrate annual growth in excess of 20 per cent, and which Omnia believes it can scale rapidly through increased funding and marketing. The company will only invest in businesses where the management team has a proven track record.
Omnia works predominantly in fast-moving sectors such as technology, entertainment and fashion.
The planned investments Omnia has in its sights with the capital raised by the Omnia Corporate Bond offer include:
Gravity Global – a branding agency with a strong and diverse portfolio of clients, including Mastercard, HSBC and UBS, in the world of financial services, retail brands such as Bosch and Mazda, and aircraft manufacturer Airbus. Gravity Global generated earnings of GBP1.9 million in 2015/2016 and is projecting earnings of GBP2.3 million in 2016/2017.
Flightworx – a specialist supplier of high quality flight support services, the British firm, established in 2008, enjoys solid international representation and has become one of the largest and most profitable players in its sector. Flightworx is projecting earnings of EUR1.2 million for the 2016/2017 year and posted profits of EUR635,000 in 2015/2016.
Kluger Agency – a music industry brand partnership agency, representing more than 60 brands and specialising in product placement and endorsements. Its clients including Jason Derulo, Lady Gaga, Britney Spears and Christine Aguilera. The Kluger Agency is projecting earnings of over USD2m in 2017.
Yakuza – a German clothing firm, known for its provocative streetwear, capital raised will help to fund Omnia’s acquisition of a majority shareholding in this business. Omnia believes it can grow operating profits from a forecast EUR2.8 million for 2016 to EUR10 million within three years, which would put the company’s value when publicly listed at circa EUR300 million.
These four companies – which Omnia intends will form part of an expected 15 strong portfolio within the next 12 months – are each delivering a minimum 20 per cent growth per annum.
Gravity Global will help Flightworx to improve its branding and marketing, whilst Kluger will help Yakuza to secure worldwide celebrity endorsements for its fashion lines and with its social media marketing.
Omnia raises finance secured against high value assets to generate a regular income stream; these assets will typically include works of art, bonded wine collections and classic cars. Omnia raises an agreed proportion of the asset’s value – which is never in excess of 50 per cent of the value of the assets – and uses the finance raised to fund the investments made by Omnia Private Equity AG, paying the asset owner a coupon of 3 per cent per annum.
Bondholders will enjoy three levels of protection: a debenture over the assets of OMNIA Bonds giving bondholders first charge over all of the company’s assets; security over the investments at Omnia Private Equity AG; and security over the artwork.
Once all the assets of Omnia Private Equity AG are exhausted, Omnia Bonds plc has a charge over the real assets that were pledged, and against which funds were raised.
Daniel Hansen (pictured), CEO and founder of Omnia, says: “We have been offering finance secured against passion investments such as fine art for some time, but now we have made it possible for asset owners to have their cake and eat it – to earn a residual cash flow off the value of their assets without having to sell them. The model is not something we have come across before, so it is something that we are very excited about and which we believe to be the best way to structure capital for our private equity investments.
“It is a model which makes it possible for us to invest in companies in a lean, fast and flexible way, and which is very different from traditional private equity funds. In selecting companies to invest in, we are not the classic venture capitalist; the business plan and balance sheet are crucial, but the people behind the numbers – and the way in which they have achieved them – are equally if not more important for Omnia.
“At Omnia we take nothing more seriously than the business of investing other people’s money, and treat it as if it is our own.
“The Omnia Corporate Bond creates an opportunity to invest in a number of successful, fast-moving companies. Companies like Flightworx and Yakuza represent a compelling investment proposition, and we are delighted to share this opportunity with the wider investment community. We are excited about expanding our business in this way and to have found a way of satisfying the needs of our high net worth private clients and prospective bondholders in a fashion which we believe to be truly unique.”