Private Debt Funds Are Going Mainstream

UK private lending is attracting global investor interest

Craig Reeves, Founder, Prestige Asset Management/Prestige Funds

We spend a great deal of time talking to overseas investors about the UK. As a fund with a specific focus on secured lending in the UK market, it is natural that they will want to ask us about the current political and economic climate in the UK, as the national debate on Brexit will fill much of the news agenda overseas investors see coming out of the UK.

But the investment case for UK private debt is much wider than simply Brexit. There are a number of other important fiscal and business factors that are creating opportunities for investors in the UK at the moment, along with fundamental changes in the way business is being financed and how business is seeking to improve efficiency and productivity.

In this article we look at the case for alternative lending in the UK, why its role is becoming more important and also what is driving the increased institutional investor interest in this asset class.

The challenges for small businesses

Owners and managers of small and medium-sized enterprises (SMEs) in the UK may sometimes feel that the world is out to get them. Running a small business is tough enough without the panoply of obstacles that have been inadvertently created for UK companies over the past few years with the generation of mountains of post-2008 ‘red tape’.

A week does not seem to go past without issues being thrown up for businesses owners around one or more marquee names in the banking industry.

For example, the Royal Bank of Scotland announced in May that it would be closing 162 branches across England and Wales. This followed other announcements to close 52 branches in Scotland and a further 197 NatWest branches, part of the same group. According to the Unite trade union, this will force many customers in rural communities to make a return journey of 25 miles to reach an alternative bank branch.

This article is only available to subscribers.

Having problems?

If you have any questions regarding subscriptions or restricted content, please contact us on +44 (0)207 278 3385 or info@hedgefundjournal.com