Reward Finance doubles its lending capability with £40m investment
Reward Finance Group, the Leeds and Manchester-based alternative funder, has received a £40m investment from Foresight Group, which will double the amount of funds available for the company to lend to SMEs.
Foresight Group, a global independent infrastructure and private equity investment manager with £2.7bn of assets under management, has provided Reward Finance with a secured loan note facility against the investment, which will significantly increase its lending capabilities.
Reward Finance, which was founded in 2011 by joint managing directors, Tom Flannery and David Jones, was identified as an attractive investment vehicle for Foresight as it has delivered year-on-year growth in its loan book and pre-tax profit.
In the year ending February 2017, Reward advanced funds totalling £84m and the year-end loan book stood at £40m, up 25% on the previous year. Corresponding income grew £7.56m and pre-tax profit was £3.5m. In addition the company continued to maintain its low bad debt rates, with write-offs representing only 0.3% of total funds advanced, due the robust underwriting procedures and experienced risk management team.
Reward is 70% owned by Dr Christo Wiese’s Johannesburg Stock Exchange-listed Tradehold Limited, with Reward’s management team owning the remainder.
Commenting on the investment, Tom Flannery, Reward’s joint managing director, said:
“This is a significant step forward in the short history of Reward Finance Group Ltd. While we have been growing the business with substantial loan facilities provided by our ultimate parent since our inception in 2011, we have been looking for a senior debt funding facility to take the business on to the next level.
“Amy Crofton and the Foresight team have an in-depth understanding of the UK alternative funding market, and really grasped that no one deal is the same as the next, when lending to SMEs. Foresight therefore tailor-made the loan note facility to make it a truly bespoke funding solution and well suited to our business needs.”
Foresight investment manager Amy Crofton, commented:
“Reward Finance Group has an exceptionally strong track record of profitable growth. We have known the business for some time and have been impressed by its development over the last few years. Working with the Reward team, we structured a flexible debt facility that will provide substantial new capital resources to promote the ongoing success of the Company”.
James Livingston, Foresight partner, added:
“We’re delighted to back Tom, Dave and the broader Reward team. They are successfully addressing a significant gap in the market and continue to expand their offering both in terms of national reach, with the opening of additional offices, and debt offerings. This investment represents a healthy diversification for our growing portfolio which we are seeking to continue.”
Dr. Christo Wiese, executive chairman Tradehold SA, commented:
”I have been excited about the potential of Reward since I met Tom and David in 2011. With Tradehold’s financial support they have built an innovative niche business and, with the Foresight deal, we now have the ability to grow this business even more strongly over the next five years, within our new financial services vehicle.”