Funding Circle

Funding Circle launches institutional fund

Funding Circle and Merseyside Pension Fund have jointly launched a new private direct lending fund which allows institutional investors to back UK SMEs.

The UK Economic Impact Fund gives investors, including pension funds, insurance companies and local authorities, the opportunity to lend directly to SMEs.

Merseyside Pension Fund and Funding Circle will jointly invest £30m to initially support an estimated 430 SMEs across the UK funded via an eight-year, closed-ended structure targeting an annualised net return of 5.5–6.5%.

“[This] announcement is further validation of the important role lending platforms play in making the SME loan asset class accessible to a wide range of investors,” said Sachin Patel, chief capital officer at Funding Circle.

“Through our latest UK Economic Impact Fund, investors can contribute to economic growth and job creation by supporting small businesses, while earning attractive, stable returns as a result.”

Linda Desforges, senior portfolio manager at Merseyside Pension Fund, added: “We view Funding Circle as the pre-eminent operator in the platform lending space and are pleased that through [its] infrastructure we can support small businesses while earning a good level of income for the pension fund.”

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