New fintech platform Blossom is bringing bond investments to a younger demographic with no minimum investment required and targeting a 3 percent fixed income return.
Co-founded by entrepreneur Gaby Rosenberg, Blossom is backed by fund manager Fortlake Asset Management whose major shareholder is investor Alex Waislitz, and the brainchild of ex UBS executive Christian Baylis.
Aimed at risk-averse and predominantly young female investors the micro-investing platform has launched with over 850 investors tipping in $3.4 million in the first week since launch on June 7.
“You can jump in the app, set a savings goal, you receive a personalised flower. And then you watch your flower grow as your savings blossom,” Rosenberg said in the Australian Financial Review. “We really want to help Australians build and foster healthy savings habits.”
Blossom says it is striving to make saving simple and affordable for all. Along with no minimum application amount, there’s a minimum withdrawal amount of $0.01, and no sign-up, transfer or withdrawal fees.
Bonds and other fixed-income investments usually come with high minimum investment amounts and long lock-up periods.
Initially, the investments will be invested in Fortlake’s Real-Income Fund, made up of A-grade corporate and government bonds and mortgage-backed securities.
In regard to earned fees and returns, Blossom says, “The first 3% p.a. available is paid to Blossom customers. Then our total of 1% in external fees get paid out in the following waterfall-like structure:
- The first 0.5% is paid to the liquidity manager – Fortlake Asset Management Limited (unless and to the extent any of that is waived by the liquidity manager).
- The next 0.5% is paid to the Responsible Entity to cover expenses (there is no responsible entity fee).”
“The rest goes to our Threshold Manager, which means when the Fund makes interim excess returns, the excess will be paid to BlossomApp Pty Limited (BlossomApp). This helps BlossomApp (in its discretion) pay into the Fund when potential interim returns are less than 3% p.a. in the future and continue to make the Blossom Fund better for you.”
Fortlake is Blossom’s fund manager, with support from Gleneagle Securities as responsible asset manager.
Alex Waislitz said, “In a low-interest rate world, people are looking for smarter ways to make their savings work for them.
“Blossom is able to provide income and security levels that will appeal to many savers.”