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Exclusive: IW Capital expands SME lending proposition with launch of its first secured debt fund


  • By alex.sullivan@cliftonmedialab.com
  • EIS
  • News
IW Capital

 

The debt, equity and EIS investment specialist IW Capital has launched its first secured debt fund.

It will be the first in a series of diversified investment vehicles that IW Capital is planning to launch over the coming months.

IW Capital told IFA Magazine, exclusively, that this launch catalyses a conclusive £100m in growth finance for UK SMEs across 2018/19 and that this initiative is in direct response to the increased traction that its secured debt offering has gained in the market.

The fund will raise £4.5m and target mainly the high net-worth and family office market. Additionally, it will also be positioned to attract investment from the wider IFA and retail investment arena. It will operate for three years, and thereafter there will be a 12-month run-off period. It will aim to pay investors a minimum return of 7.0% per annum and if returns have exceeded this level at the end of its life, then any income or capital gains in excess of this target future will be returned to investors and IW Capital on a 50:50 basis.

The firm also explained that it will present a sector agnostic approach, with investors’ funds being allocated across a diverse portfolio of loans supporting profitable and established businesses. All lending will be secured by a mortgage debenture over the borrower’s assets, and any wider security needs will be met based upon a case-by-case appraisal. Consistent with IW Capital’s robust approach to loan structuring, all lots will include financial covenants and reporting obligations on the part of the borrower.

Luke Davis (pictured above), CEO and founder of IW Capital, said: “With the ongoing disintermediation of the UK alternative finance arena, we are seeing greater than ever demand from SMEs for more diversified funding options. IW Capital has championed this shift in the industry over the course of the last decade- first through equity and EIS, then with the launch of our debt arm and now with the launch of this new secured fund. It is an incredible milestone for IW Capital, and I’m very proud of the team who have come together to make this all possible.”

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