Waterfall Asset Management to fund £1 billion of SME loans through Funding Circle platform
07 December 2018
Funding Circle Holdings plc (“Funding Circle”), the leading small business loans platform in the UK, US, Germany and the Netherlands(1), announces that Funding Circle UK and Waterfall Asset Management, LLC (“Waterfall”), a leading institutional asset manager focused on structured credit, have entered into a strategic partnership to support the growth of UK small businesses. Under the terms of the agreement, Waterfall will invest in £1 billion of loans originated through Funding Circle’s UK platform over a two-year period. Waterfall’s investment will be partially financed by Deutsche Bank.
This significant investment will support the growth of approximately 14,000 small businesses(2), creating and sustaining thousands of new jobs across the UK(3). Waterfall joins a diverse group of investors lending to small businesses through Funding Circle, including 85,000 individuals, the British Business Bank, the European Investment Bank and other financial institutions, including pension funds and insurance companies.
Today’s announcement follows a record quarter for group originations, with Funding Circle facilitating £564 million to small businesses in the third quarter of the year across its four markets, including £377 million in the UK.
Samir Desai, Funding Circle co-founder and CEO, said: “We are increasingly seeing substantial commitments from investors looking to purchase loans in each of our geographies. Our business model has opened up small business lending as an asset class for the first time, allowing investors such as individuals, asset managers, insurers, and government entities to earn attractive, risk-adjusted returns by lending directly to businesses. We look forward to working closely with Waterfall and Deutsche Bank to support the growth of even more small businesses across the UK.”
Henrik Malmer, Managing Director at Waterfall, said: “We are excited that our partnership with Funding Circle will enable us to continue investing in SME loans in the UK. This segment has been underserved by traditional lenders, and Funding Circle’s platform and technology provides borrowers access to credit whilst allowing investors such as Waterfall to diversify their portfolios into an interesting and exciting asset class.”
(1)By Q1 2018 originations for the United Kingdom and the Netherlands, and cumulative originations for the United States and Germany, according to OC&C analysis and estimates.
(2)Estimate based on average UK loan size of £70,000.
(3)Research by Oxford Economicsfound that Funding Circle loans outstanding at the end of 2017 created and sustained 75,000 jobs in the UK, US, Germany and the Netherlands.
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Notes to editor
About Funding Circle
Funding Circle (www.fundingcircle.com) is a global small business loans platform, matching small businesses who want to borrow with investors who want to lend in the UK, US, Germany and the Netherlands. Since launching in 2010, investors across Funding Circle’s geographies – including more than 85,000 retail investors, banks, asset management companies, insurance companies, government-backed entities and funds – have lent over £5.6 billion to more than 56,000 businesses globally.
About Waterfall Asset Management, LLC
Waterfall is an SEC-registered investment adviser focused on High Yield Asset Backed Security (ABS) and loan investments. Waterfall was founded in 2005 by Tom Capasse and Jack Ross, two individuals who were early leaders of the ABS industry, and who have 50+ combined years of ABS/Loan trading, banking and servicing experience. Capasse and Ross started the ABS Group at Merrill Lynch in the 1980s and conducted the first ABS issuances for many of the more than 40+ ABS sectors in which Waterfall invests. Waterfall has approximately $7.3 billion in assets under management (as of September 30, 2018).