BNP Paribas Asset Management to launch UK SME Direct Lending Fund

BNP Paribas Asset Management (‘BNPP AM’), the investment management arm of BNP Paribas, announces that it is to launch a vehicle offering clients access to the UK SME (small & medium-sized enterprise) lending market.

BNP Paribas UK SME Debt Fund 1 will invest in senior loans to SMEs with an annual turnover of less than £50 million, which are originated via BNPP AM’s SME Alternative Financing platform. Utilising proprietary big data technology, together with access to BNP Paribas’ balance sheet and infrastructure, the platform provides SMEs with access to a sustainable and complementary source of funding.

Stéphane Blanchoz, Head of SME Alternative Financing at BNP Paribas Asset Management, comments:
“Since the global financial crisis there has been a paradigm shift in the market as new funding models have emerged. Banks remain a key feature of the SME lending market and investment funds have traditionally been providing financing in the upper end of the mid-market area, while smaller companies are increasingly accessing finance through fintech crowdfunding solutions or peer-to-peer lending. We are targeting SMEs between these two market segments, where there are opportunities for businesses to contribute to UK GDP growth, but where sustainable funding solutions are limited.”

Philip Dawes, Head of UK Sales (UK & Ireland) at BNP Paribas Asset Management, adds:
“BNP Paribas UK SME Debt Fund 1 represents an extension to our private debt and real assets capability, an area of continued interest to our clients. SMEs continue to play an important role in the real economy in the UK, in terms of employment, growth and innovation. The launch of this fund is therefore consistent with our aim of offering impact investment solutions for our clients, by providing sustainable capital solutions to a segment of the market that remains underserved by other financial solutions.”

BNPP AM continues to form strategic alliances to assist in the origination of SME loans as part of its innovative and disruptive business model. In November 2017 it announced the acquisition of a 10% stake in alternative SME credit specialist Caple, whose proprietary technology platform offers access to a network of around 70 accountancy and advisory firms. More recently, in July 2018, BNPP AM announced a strategic alliance with CODE Investing, a UK based fintech lending platform.