The boutique fund manager believes alternative finance and the drawing back of banks from are traditional lending is set to continue, providing excellent opportunities for non-bank players.
Structural tailwinds for alternative finance and non-bank lending assets show no sign of abating providing an attractive investment opportunity, according to Ben Conway, a fund manager at Hawksmoor Investment Management.
Conway, who co-manages the open-ended £143m Hawksmoor Vanbrugh and £157m Hawksmoor Distribution funds, has recently been topping up a holding in the RM Secured Direct Lending fund.
“We topped up RMDL in the recent placing. We continue to like the way RM are gently growing the fund – taking small manageable amounts of capital and deploying it sensibly. Last year they delivered a 6.5p dividend, by exposing their investors to a highly bespoke diversified set of debt investments,” Conway said.
“Compare this to the yields available on traditional fixed income investments and the lack of liquidity of the investment trusts shares are a small price to pay.“
Conway believes that the trend that pushed alternative credit assets towards more and more investors should continue as banks struggle to finance the real economy.
“The structural tail wind for alternative finance – the drawing back of banks from what are fairly traditional lending opportunities – is a theme that remains strong and one which we expect to play out for many years,” he said.
“Even if competition does come back into this sector, we have confidence in the RM team not to lower standards and to continue to be extremely choosy over the deals they take on. Evidence to date strongly supports our confidence,” he added.