The flow of US institutional capital into the UK peer-to-peer market has begun with a bang.
Victory Park Capital – one of the largest alternative finance-focused institutional players in the States – has committed to investing up to £150 million via the Assetz Capital platform over the next 5 years. Victory Park focuses on middle market debt and equity investments – and has indicated that the funding will support small British businesses. The £150m deal is the largest single institutional investment to occur within the UK market, narrowly edging out the £132m KLS Diversified Asset Management-Funding Circle pact from early December.
Gordon Watson, Principal at Victory Park, commented:
"It is a great time to partner with Assetz Capital as the company continues to scale in an underserved market. Given Assetz Capital’s success to date, its experienced management team, and our expertise in the specialty finance industry, we believe Assetz Capital will be well positioned to achieve substantial growth over time.”
According to the Liberum AltFi Volume Index, Assetz has lent a cumulative total of over £55m so far. The platform, which specializes in providing investment opportunities that are always backed by realizable security, recently struck a partnership with The Interface Financial Group (IFG) in order to bring a newly-minted invoice finance service to UK shores. That product should arrive within the next few months.
Crucially, IFG has financed hundreds of thousands of small businesses in the US during its 40 years of existence. Coupling that pipeline with this monstrous investment from Victory Park could result in a sudden leap in Assetz’ lending volumes. It’s been a strong start to the year for the platform.
“We are excited to announce this partnership with a team as experienced in this sector as Victory Park Capital. This lending facility will allow us to meet the increasing demand for capital from businesses in the U.K., and will help increase loan origination activity as a whole including greater volume of loans for retail investors.”
Given that the largest US platforms (Lending Club, Prosper, SoFi, etc.) are already saturated with institutional capital, the sophisticated but slighter UK market (which is powered by a far greater proportion of retail money) is the logical next port of call for P2P-hungry institutions from across the pond. Further instances of large-scale deals will surely follow.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.