Assetz Capital secures £200m funding from Aeon Investments
Assetz Capital, the specialist SME finance platform, has announced a new funding relationship with Aeon Investments, a London based credit-focused investment company.
Over the next three years, Aeon Investments will inject an initial £200m of investment into SME loans arranged by Assetz Capital, enabling the business to provide commercial mortgages of up to £10m on commercial investment properties. This enables Assetz Capital to further diversify its commercial mortgage lending and expand its capacity to lend across the broadest range of commercial properties used by UK SMEs.
The new funding comes at a critical time for SMEs, which are disproportionately impacted by rising costs of materials, cost of inflation, increasing wages and a shortage of skilled staff. There is an increasing requirement for new funding as banks are visibly pulling back funding for SMEs. Assetz Capital and Aeon Investments share in an ambition to meet this need and support viable SMEs through specialist financing solutions.
Ongoing commitment to driving growth of UK SME sector
As Assetz Capital continues to grow the total amount of retail and institutional funds lent to UK SME businesses, currently standing at £1.5bn, the relationship with Aeon Investment is a further key milestone.
Aeon’s partnership with Assetz Capital will enable it to expand its commercial real estate loan portfolio in the UK, and despite the challenging environment, it demonstrates Aeon’s commitment to the sector. Having already signed similar agreements with two other lenders, Aeon believes with rigorous asset selection and conservative covenants, commercial real estate debt remains an asset class with attractive relative value.
Aeon’s investment is supported by recent research where it surveyed 100 European institutional investors who collectively manage around $574bn in assets under management, which revealed 84% believe pensions schemes will increase their allocation to structured credit products. This will be driven by their attractive yields when compared to other asset classes, greater innovation and transparency in the structured credit market, and an improving regulatory environment.
Commenting on the announcement, Stuart Law, CEO of the Assetz Capital, said: “We’re thrilled to start a new relationship with a like-minded company equally committed to supporting the SME sector. The need for SME funding has never been more apparent as an increasing number of traditional lenders aren’t offering financing solutions to SMEs. Together, through innovative and alternative financing we can enable UK businesses to grow and scale up.”
Oumar Diallo, CEO at Aeon Investments added: “Our agreement with Assetz Capital is the latest example of our commitment to the commercial real estate sector. If you adopt a strong focus on risk management and have prudent LTVs and conservative debt coverage, we believe commercial real estate lending is a very attractive asset class, particularly in the current environment with depressed fixed income market and falling equity prices.”