Investors to Inject $500M into New Diamond Fund

RAPAPORT... A new fund for diamond companies is set to launch, aiming to provide an easier way for firms to obtain credit."The diamond industry is in a major state of flux, with all the major commercial banks exiting the space," Chris Del Gatto (pictured), creator of the Delgatto Diamond Fund, told Rapaport News. "There is an unprecedented shortage of working capital among dealers, wholesalers, and cutters." The venture seeks to address that need for funds in a way that is both sustainable and affordable, explained Del Gatto, who is also the CEO of "I Do Now I Don't," a consumer-focused diamond-and-jewelry sales platform. The fund will total $100 million in its first six to nine months, with between $250,000 and $10 million available for clients to borrow. Del Gatto has the backing of a group of individual investors who have the capacity to increase the facility to $500 million, potentially growing to $1 billion depending on demand, he said.Getting funding will be much easier than the current process companies must go through to obtain a bankloan, according to Del Gatto. The lender will not necessarily review acompany's profit-and-loss statement the way a financial institution would, butinstead will judge a potential borrower based on other factors, such asreferences.In addition, borrowers will obtain loans using their diamondsas collateral. While the fund will hold the stones, clients will havefull access to them at any time, with a few hours' notice. Del Gatto's servicewill also include the use of his online sales platform - the largest of itskind, he said - enabling clients to market those diamonds toconsumers around the world. Using the platform will provide dealers with accessnot only to capital, but also to consumers, rather than just retail jewelers,which, he stated, will help them increase their profit margin."This is an unprecedentedinitiative in our industry, and we expect that demand will be so great that wecan quickly become the largest nontraditional diamond financier globally," DelGatto added.