Funding Circle launches UK Economic Impact Fund for institutional investors

The 8-year closed-ended fund has already received £30m from Merseyside Pension Fund.

Leading peer-to-peer lender Funding Circle has unveiled a new direct lending fund, called the UK Economic Impact Fund, to further open up the platform to institutional investors.

Targeting annualised net returns of between 5.5% and 6.5%, the 8-year closed-ended fund structure is designed to appeal to pension funds, insurance companies and local authorities.

“Today’s announcement is further validation of the important role lending platforms play in making the SME loan asset class accessible to a wide range of investors,” said Sachin Patel, Funding Circle’s Chief Capital Officer.

“Through our latest UK Economic Impact Fund investors can contribute to economic growth and job creation by supporting small businesses, whilst earning attractive, stable returns as a result.”

It also revealed Merseyside Pension Fund has already agreed to invest £30m in the new fund at launch.

Linda Desforges, Merseyside’s Senior Portfolio Manager said:

“We view Funding Circle as the pre-eminent operator in the platform lending space and are pleased that through their infrastructure we can support small businesses whilst earning a good level of income for the Pension Fund.”