IW CAPITAL has raised £10m from its first secured debt fund, which will be used to support UK small- and medium-sized enterprises (SME).
The investment firm has closed the fund after raising £2m from a final funding round from new high-net-worth investors and its existing client base.
The fund will operate for three years, with a target minimum return of seven per cent per annum.
Investors’ funds are allocated across a diverse portfolio of SME loans. All loans are secured by a mortgage debenture over the borrower’s assets and include financial covenants and quarterly reporting obligations on the part of the borrower.
“With the ongoing disintermediation of the UK alternative finance arena, we are seeing greater than ever demand from SMEs for more diversified funding options,” said Luke Davis, chief executive and founder of IW Capital.
“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 this 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.”
Read more: Millennials more likely to invest in SMEs
IW Capital, which has raised £100m for SMEs via a mix of debt and equity over the past seven years, said it is perfectly positioned to fully transition into the debt finance market.
The boutique investment firm launched its first retail investor-friendly debt fund in March, offering returns of up to nine per cent per year with a minimum investment of £10,000.
Its clients are typically high net-worth individuals, ultra-high net-worth individuals, family offices, wealth managers and IFAs.