A SYNDICATE of 86 private investors have placed £8m into a specialist lending fund which has traditionally been funded by institutional investors, in the latest sign that alternative finance is entering the mainstream.
The group of Connection Capital clients made the investment in the BCI Credit Opportunities Fund, which provides loan capital of £2m-£20m to alternative lenders which operate digital platforms.
The fund invests in a diversified portfolio of alternative lending platforms, including a lender offering postgraduate student loans based on future earning potential as well as current credit risk, and a specialist payroll linked model that improves access to funding, helping workers become debt-free cheaply and save towards their financial goals.
While the minimum investment for fund managers is £250,000, Connection Capital’s aggregation model meant that individual investors could participate with smaller amounts, in multiples of £25,000.
The response to the fund has prompted Connection Capital to hail the huge potential of the alternative finance market.
Claire Madden, managing partner at Connection Capital, said: “Fintech and the alternative lending sector are growing at a rapid rate and show no signs of stopping, so there are huge opportunities to be seized here, and we’re delighted to give our clients a chance to be part of it.”
Connection Capital acts as a specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds.
It had approximately £250m in funds under management by 31 March 2019, with average annual returns of 10 per cent.