Generate returns instead of hanging around: tenants can now put their deposits into the stock market

The idea is impressive: Lease deposits often remain untouched for years or even decades and are therefore ideal for investing in the stock market. However, it seems that no bank has thought of this idea so far.

Evorest was founded not by bankers, but by former management consultants from BCG. Former Mobiliar boss and current Chairman of Luzerner Kantonalbank Markus Hongler is also on the board of directors. He emphasizes that this business is private and has nothing to do with the bank. First of all, he is convinced of this idea. “This is an innovative solution that no one has offered before,” says Hongler. First of all, it brings the necessary regulatory knowledge.

At first glance, Evorest resembles many investment fintechs known from the 3a accounts space. The tenant uses a digital platform to determine how the money will be invested: offensively, defensively, or not in the exchange. Cottiati says the account can be opened within 24 hours without any paperwork.

Return on investment belongs to tenants

As with any stock market transaction, the following applies to tenants: they bear the management costs in the order of magnitude of their 3a offering, but also bear the investment risk and receive the return. But the similarities with regular bank deposits end there.

Evorest’s offering is primarily aimed at property management companies, as it is landlords who often turn to banks for rental deposits. “Our business model is B2B2C and we provide a complete solution for homeowners,” says Cottiati. The tool also gives them a live overview of the status of all warehouses.

So what happens if there is a stock market crash? Isn’t the purpose of giving a rent deposit exactly to always have enough money to cover the tenant’s losses? Cottiati says Evorest guarantees homeowners the original amount. If business gets tight, the money will be advanced and demanded back from the tenants. In other words, if the deposit is too low to cover rental losses due to a stock market crash, the tenant will need to deposit additional money. However, according to Cottiati, this is unlikely because in only one percent of all cases the entire deposit is actually used to pay for damages.

Accounts are once again managed through Kreditarbank Lenzburg

Evorest is backed by a well-known banking partner: Mortgage Bank Lenzburg (HBL). Manages accounts and conducts securities business. “Hypi”, which also manages the accounts of well-known startups such as Neon, Kaspar&, Findependent and Yokoy on the Finstar platform, has also made a name for itself as a fintech bank in recent years.

Evorest is not HBL’s first collaboration in the field of rental deposits, either, as company spokesman Marc Fischer noted. The digital rent deposit solution was launched in 2022 together with the real estate platform Flatfox. Since 2021, Flatfox has been owned by Mobiliar-Versicherung, which has an indirect stake in the “Handelszeitung” through the Ringier publishing house.