Banking on Brilliance is a WDC Newsletter mini-series that focuses on the companies providing financial services to the industry, and how they influence and are influenced by reputational risk and risk mitigation in the diamond supply chain. Each article in the series examines the relationship between the provision of financial and credit facilities with the integrity and responsible management of the supply chain.
The second article in the series features Kathy Hillelson, CEO of Owl Financial Group in New York.
WE'RE NOT JUST LENDERS—WE'RE DIAMANTAIRES TOO
Diamantaires, as well as financiers. Owl Financial Group CEO Kathy Hillelson with her father Kalman Klein, the diamond trade veteran, with whom she founded the company.
MAY 22, 2025
Where it comes to financial services, the diamond industry’s landscape has changed dramatically over the past decade. According to analyst Edahn Golan, mid-stream diamond industry financing peaked in 2013, when it stood at $16 billion. Almost all of the funding at the time was supplied by the commercial banks serving the sector. By 2023, however, financing had fallen to approximately $6 billion, and one third of that was being obtained outside of the traditional bank financing system.
The trend of commercial banks exiting the diamond industry was already apparent in 2013, and discussions were being conducted at the time about developing other avenues of financing, although few if any viable options were then available. But a decade later, the situation is markedly different, with more than 30 percent of credit being made available to the midstream coming from alternative sources.
One of the organizations now operating in that space is Owl Financial Group. Established in 2011 by Kalman Klein and Kathy Hillelson, the company offers asset-based financial solutions, in which Owl purchases stock from a lender, issuing an invoice after an evaluation has been completed. When the lender’s purchase/buy-back agreement comes due, he or she wires back the amount owed, and the assets are returned.
The WDC Newsletter spoke to Ms. Hilleson, who today is CEO of the the Owl Financial Group.
How would you describe your company’s relationship with the diamond industry and trade as a financial services provider, in terms of exposure and the types of services you provide?
KATHY HILLELSON: I’ve grown up in the diamond business—it’s in my DNA.
At Owl Financial Group, everything we do is built around the real needs of our trade. We’re not a typical finance company; we’re part of the industry. We provide capital through asset-based financing, mainly through a purchase-buyback structure, which give our clients fast liquidity while keeping flexibility over their goods. Whether it’s loose diamonds, jewelry, or watches—we understand the value, we understand the timing, and we strive to get it done within 48 hours! That’s what sets us apart.
We’re here to help manufacturers, wholesalers, and retailers access the capital they need to run and grow their businesses without the red tape of a traditional bank.
How long have you been providing services and facilities to the diamond industry, and how has this developed in recent years?
KATHY HILLELSON: Owl has been active since 2011, but our experience goes back much further—my family has been in the trade for over 50 years.
Kathy Hillelson, CEO of the Owl Financial Group in New York.
What started out as a small lending operation to help people in our circle has grown into a trusted financial resource for clients around the world. Over the years, we’ve adjusted how we lend. We’ve introduced better tech for risk assessment and expanded our offerings based on what the market really needs.
As banks have pulled back, we’ve leaned in, giving people a reliable option when they need working capital or inventory financing fast. Whether supporting a diamond dealer with a time-sensitive purchase or helping a retailer unlock capital from their existing inventory to expand or revamp their business, Owl is here to make the process easier and more efficient.
In terms of inherent risk (both reputational and financial), to what degree do you believe companies from the diamond sector fall into a category that requires special attention, and why?
KATHY HILLELSON: The diamond industry definitely carries unique risks. You’re dealing with high-value goods, global transactions, and a supply chain that can be hard to trace. So yes, it requires attention—but it’s also an industry built on relationships and trust.
We do our part by focusing on transparency and by working with people who are committed to responsible sourcing and ethical practices. We know the risks, but we also know how to manage them because we’ve been in the business ourselves. That gives us a different level of comfort and insight than someone just looking in from the outside.
In recent years, there has been a considerable falloff in credit facilities provided by commercial banks to the diamond industry, as well as a decline in the number of banks servicing the industry. To what do you attribute these phenomena?
KATHY HILLELSON: It really comes down to risk appetite and regulation. Banks started backing away as AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements got stricter, and they didn’t want to deal with the complexity of our trade. On top of that, they struggle to understand how to value our collateral—it’s not a standard balance sheet with fixed assets. And with issues like synthetic diamonds and changing consumer trends, many banks decided it was too complicated.
That’s where Owl stepped in. We understand the assets and the people behind them, and that’s why we’ve been able to fill the gap.
Do you believe that the trend of commercial banks reducing their profile in the diamond industry is reversible, and why?
KATHY HILLELSON: Honestly, I don’t think banks are coming back—not anytime soon. In fact, I recently heard about a bank closing down business accounts just because the company name included words like “diamond” or “jewelry.” That says a lot about where things are heading.
They’ve shifted focus to safer sectors with easier reporting and less scrutiny. And that’s okay. It’s actually created more room for companies like ours to grow and serve the industry in a more tailored way. We’re nimble, we understand the nuances of this business, and we can move fast. That’s what the trade needs—especially today.
What were the reasons for you developing a financial services strategy that is different from those banks that have withdrawn from the industry?
KATHY HILLELSON: Simple—we saw a gap and knew we could fill it better. Banks don’t speak our language. They look at credit scores, long processing times, and checklists. We look at the goods, the relationships, and the real value of the deal.
We built Owl around asset-based lending because we knew from experience that most people in the trade don’t fit into the traditional lending box. We’ve structured everything to be fast, transparent, and grounded in real industry knowledge.
We’re not just lenders—we’re diamantaires too. That makes all the difference.
How important is to your company that a client or prospective client verifiably demonstrates that it is compliant with the Kimberley Process, WDC System of Warranties and/or the RJC Code of Practices, particularly if the client is requesting lines of credit?
KATHY HILLELSON: At Owl Financial Group, we take ethical sourcing and responsible business practices seriously. With over five decades of industry heritage, we understand the importance of maintaining integrity across the diamond supply chain.
While we do not offer traditional lines of credit, we provide asset-based financial solutions—and when evaluating clients, particularly those seeking financing backed by inventory or assets, we place strong emphasis on compliance with the Kimberley Process, the World Diamond Council’s System of Warranties, and the RJC Code of Practices.
What type of verification in terms of responsible business practices do you typically require from clients and prospective clients requesting capital?
KATHY HILLELSON: We have a thorough onboarding process. First, we verify the company structure and ownership—basic KYC and AML. Then we look at the goods—certified diamonds, branded watches, gold, or jewelry. Everything has to be documented properly. We also check trade references and past deal history to make sure the business is operating transparently.
It’s not just about the paperwork—it’s about knowing who we’re dealing with.
To what degree do you believe that the difficulty in obtaining bank credit, as was the case for so many years, led to greater awareness in the diamond industry of the importance of doing one’s own supply chain due diligence?
KATHY HILLELSON: It’s had a big impact. With bank financing harder to come by, companies realized that to attract capital—whether from lenders like us or from investors—they had to tighten things up. That means better record-keeping, clearer sourcing, and more transparency.
It’s actually helped push the industry in the right direction. We’ve seen clients and hope to see more get serious about compliance because they understand it’s now tied directly to their ability to grow and access funding.
It’s no longer just about doing what’s right—it’s become good business, too.