Private equity firm IW Capital launches debt investment arm.
IW Capital, a private equity firm with investments in WeSwap, Money&Co, Square Pie and Brewhouse & Kitchen, has launched a new debt-investment service for small businesses.
The firm is attempting to capitalise on the boom in alternative lending options for SMEs in the UK. Its research reveals that 30 per cent of UK investors will be looking to alternative finance schemes that support British SMEs in the coming year. A previous IW Capital survey of 2,000 adults found that 52 per cent would consider supporting SMEs through private investment in spite of the uncertainty created by Brexit.
The Liberum AltFi Volume Index UK shows that lending origination in the peer-to-peer business lending sector has grown at a rate of 53.55 per cent over the past 12 months, versus the prior year period, with close to £1.5bn in loans originated in 2016 alone.
As a private equity firm, IW Capital has to date facilitated over £60m of investment in British SMEs through the enterprise investment scheme (EIS). It describes itself as “sector agnostic”, but with much of its portfolio focused on high-growth sectors and disruptive technologies. The company has hired a number of experienced credit analysts to support its expansion into the debt space.
“Over the past year, investors are clearly starting to act on their positive sentiment towards British businesses by turning to alternative investment schemes,” said Luke Davis (pictured above), CEO of IW Capital. “That’s part of the reason why we have seen an explosion in exciting, young and dynamic companies with immense growth potential across the UK. Equity investment has always been tailored towards specific companies, and with investor sentiment growing, it seemed natural for us to expand our services into the debt space and offer investors access to new opportunities.”
Given Money&Co’s recent inactivity, one might be forgiven for thinking that IW Capital’s latest initiative signals a move away from funding SMEs via the platform (which is headed up by acclaimed fund-manager Nicola Horlick). AltFi Data’s records show that Money&Co has lent less than £1m to small businesses in 2016, versus nearly £7.7m on a cumulative basis. However, when asked about Money&Co, Davis said that IW Capital’s newly launched debt arm is a “completely separate” offering. He said that the new initiative has been launched to concurrently support IW Capital’s equity offering and to open up debt-based opportunities to its existing investor network.
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.