UK lender to invest £700m into SME funding

A London-based investment firm has opened its £700m private debt fund in order to provide SMEs across the UK, Germany and Scandinavia with appropriate funding.

BlueBay Asset Management, a subsidiary of Royal Bank of Canada, has closed investment on its maiden debt fund, which attracted investments worth £250 million more than the original target set by the firm.

The project, which began in October 2011, will provide between £15 million and £85 million worth of financing to companies in northern Europe which are valued at less than €500 million.

The ‘BlueBay Direct Lending Fund’, as it has been named, raised the capital via commitments from institutional investors, including pension funds, insurance companies and family offices.

Anthony Fobel, Partner and Head of Private Lending at London-based BlueBay, said: “The growth in direct lending funds is providing a real financing alternative to companies and private-equity firms in an environment of continued retrenchment by banks from mid-market lending and we are seeing a large number of exciting investment opportunities.”

According to BlueBay, over 20 per cent of the fund has already been deployed in a number of deals across the continent, providing primarily senior and subordinated loans for acquisitions, capital growth and business restructuring.

BlueBay, established in 2001 as one of Europe’s largest managers of fixed income credit and alternative products, currently manages over £36 billion worth of assets – with offices in the US, Luxembourg, Hong Kong, Japan and London.

Speaking on the successful investment scheme, Mr Fobel added: “We are delighted to have surpassed our initial target of €500 million and to have raised over €800 million within just over a year of commencing our fund-raising.

“The fund will provide much needed growth capital to European mid market businesses, whether privately or publicly owned, as well as a source of finance to private equity sponsors.”