The latest alternative finance focused survey suggests that institutional activity will continue to rise over the next few years.
Amicus Finance – an offline, short-term, property backed lender – conducted a survey of 111 “pan-European institutional professionals” between 29th May and 15th June this year. The headline finding: 73% of investors predict that institutional investors will seek a greater exposure to the alternative finance market over the next two years.
If that prediction proves accurate, it will represent the continuation of a trend, rather than the beginning of one. AltFi Data analysis shows that the major UK P2P players have been taking on increasing amounts of institutional funding in recent times, and that that’s been a major factor in their rapidly growing transactional flows. The UK AltFi sector set a record in July by originating just over a quarter of a billion pounds (£252.3m) – thanks in no small part to institutional money,
74% of the professional investors surveyed by Amicus believe that the rampant growth of the alternative finance sector could increase the resilience of the financial system by lightening the burden on banks. The Amicus survey also revealed that nearly two thirds (64%) of respondents believe that UK and European SMEs are overly reliant on traditional bank finance.
John Jenkins, CEO of Amicus, offered his take on the numbers:
“As the economy continues to recover, institutional investors see a strong opportunity for the capital markets to play a bigger role in financing SMEs, which continue to face capital constraints due to bank deleveraging.
“Institutions increasingly recognise they can generate attractive returns through investing in alternative finance without taking on large risks. We are seeing a high level of interest from investors looking for exposure to our short term bridging loans secured against UK residential and commercial property.”
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.