The firm is expanding its SME lending proposition with the new portfolio.
IW Capital, a specialist investment firm across debt, equity and EIS, has launched its first secured debt fund raising £4.5m.
The fund is to be the first in a series of diversified investment vehicles that IW Capital is planning to launch over the coming months as part of a £100m strategy to invest in growth finance for UK SMEs across 2018/19. The firm says it is in direct response to the increased traction that its secured debt offering has gained in the market.
With the new fund IW Capital is primarily targeting the high net-worth and family office market but it says the portfolio will also be positioned to attract investment from the wider IFA and retail investment arena.
The fund will operate for three years, and thereafter there will be a 12-month run-off period. It will aim to pay investors a minimum return of 7 per cent per annum and if returns have exceeded this level at the end of the Fund's life, then any income or capital gains in excess of this target future will be returned to investors and IW Capital on a 50:50 basis, the firm says.
“All lending will be secured by a mortgage debenture over the borrower's assets, and any wider security needs will be met based upon a case-by-case appraisal. Consistent with IW Capital's robust approach to loan structuring, all lots will include financial covenants and reporting obligations on the part of the borrower.”
Luke Davis (pictured), CEO and founder of IW Capital said, "With the ongoing disintermediation of the UK alternative finance arena, we are seeing greater than ever demand from SMEs for more diversified funding options”.