AltFi.com uses cookies on this website. They help us to know a little bit about how you use our website, which improves the browsing experience and marketing - both for you and for others. They are stored locally on your device. By continuing to use this site you accept this use of cookies. Go to the Privacy and Cookies page for more information. You'll see this message only once.
Not signed in. Log in here.

Your daily download of all things alternative finance and fintech, from us at AltFi


 

New alternative credit investment trust RM Secured Direct Lending launches targeting 6.5% yield




By Daniel Lanyon on 30th November 2016

https://goo.gl/IAugCb

RMDL is a new UK investment trust established to invest in a portfolio of secured debt instruments to UK SMEs and mid-market corporates.

 

 

RM Secured Direct Lending (RMDL) will raise £100m listing on the London Stock Exchange, offering investors exposure to UK SME lending.

 

The portfolio will originate its own loans to UK firms with ticket sizes between £2-10m mostly on senior secured basis. Predominantly, this will mean investing in higher-yielding lending opportunities with loans secured against contracted, predictable medium to long-term cash flows and/or physical assets. Maturities will range from two to 10 years.

 

New issuance of investment trusts has slowed in 2016 with the only other Initial Public Offering apart from RMDL in 2016 coming from another alternative credit portfolio, Hadrian’s Wall Secured Investments in June.

 

James Robson, chief investment officer of RM Secured Direct Lending believes there is a real opportunity in market for lending to UK SMEs, since the global financial crisis of 2008. He says lending to UK SME and mid-market companies has lagged demand, creating an investment opportunity to close the gap.

 

The firm will seek out companies with a good visibility over cash flow and earnings and strong management teams, supported by tangible security packages, he adds.

 

Robson says there will also be a focus on loans with a degree of inflation protection through index-linked returns.

 

"Secured lending offers excellent risk adjusted returns in a part of the market underserved by banks and other non-bank lenders.”

 

Comments

SteveH

01 Dec 2016 11:57am

Index linked loans to SMEs. Really?


Enter your name:

Enter a comment in the box below: