Funding Circle SME Income Fund raises £14.5m through ordinary share placing

By Daniel Lanyon on Thursday 21 July 2016

Alternative Lending

Following on from the news that the fund was shifting away from raising new cash through a C share issue to ordinary shares, AltFi can reveal the completion of the placing.

The Funding Circle SME Income fund has successfully placed £14.5m of new ordinary shares at a price of £1.0153, according to filings to the London Stock Exchange.

Invesco Perpetual, the asset management firm active in the P2P marketplace lending space, and the Railways Pension Trustee Company took part in the placing subscribing for 3,714,075 ordinary shares for £3.77m and for 7,239,239 ordinary shares for £7.35m respectively. The placing becomes effective at 8.00 am on 25 July 2016.

The investment trust’s board decided to go for a tap instead of a C-share at this time as a result of the fall out from the UK's recent vote for Brexit, according to a spokeswoman for Funding Circle.

Funding Circle’s Samir Desai, co-founder of the firm and a director of the fund told AltFi last week that both routes to new capital remain on the table.

“As envisaged in the IPO prospectus, the Funding Circle SME Income Fund has a program to raise more capital through either a tap of the ordinary shares or a C-share issue,” he said.

“The former can be undertaken opportunistically where there is potential to quickly capture readily available funds. The board expects the fund to continue to use a mixture of taps and C-share raises going forward.”

The fund is the only investment trust to exclusively buy the loans of just one p2p/marketplace loans platform as well as the first fund structure to have been launched by a marketplace lending platform, Funding Circle.

The fund targets a total return of 8-9 per cent per annum including a yield of 6-7 per cent with the rest made up from capital growth. It invests in a portfolio of loans to small/medium sized enterprises originated through the Funding  Circle platform. 

Funding Circle secured a £100m injection to finance UK SME loans through its own platform from the European Investment Bank (EIB) recently, allowing it to become fully levered. 

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