French bank BNP Paribas’ asset management arm has launched BNP Paribas UK SME Debt Fund 1, which will offer clients access to the UK lending market for smaller businesses.
The new fund will invest in senior loans to UK small and medium enterprises (SMEs) with annual turnover of less than £50m through BNP Paribas Asset Management’s (BNPP AM) alternative financing platform.
The bank said that despite the impact of the global financial crisis a decade ago “banks remain a key feature of the SME lending market and investment funds have traditionally been providing financing in the upper end of the mid-market area, while smaller companies are increasingly accessing finance through fintech crowdfunding solutions or peer-to-peer [P2P] lending.”
“We are targeting SMEs between these two market segments, where there are opportunities for businesses to contribute to UK GDP growth, but where sustainable funding solutions are limited,” said Stéphane Blanchoz, BNPP AM’s head of alternative financing.”
Increased SME focus
BNP AM says it is increasing its focus on investments and partnerships in the SME sector. Last November it acquired a 10% stake in alternative SME credit company Caple, whose platform offers access to a network of 70 accountancy and advisory firms, while in February this year it launched a new investment fund specifically for fintech and insurance technology (insurtech) start-ups.
Earlier this month, BNPP AM partnered with CODE Investing, a UK-based fintech lending platform.
A new SME fund, the BNP Paribas Novo 2018 business loan fund, was launched at the end of April backed by the Caisse des Dépôts, France’s state-backed bank, to provide new sources of financing for French SMEs.
The new fund is investing through euro private placements or direct loans to finance “ambitious projects primarily by French medium-sized companies”, with up to €264m in investment available over the next three years.
In addition to credit quality the fund will target French firms meeting environmental, social and governance (ESG) criteria.