Business Lending, having launched Secure Income Fund ’SIFS1’ to institutional investors, has already received interest from pension funds and is confident that the latest Information Memorandum which has been sent to potential investors will yield positive results. According to Stuart Parfitt, managing director of Business Lending, there are already encouraging signs that pension funds are taking a proactive stance to commercial lending.
He said “There is evidence from the conversations we are having with pension funds showing there is an appetite for low risk investment with the promise of income yields comfortably in excess of deposit rates and UK Government Bonds. It is interesting to note that another fund manager, M&G, has announced plans for a UK Companies Financing Fund, and the £ 2 – 3 billion of capital required will be raised from pension funds. Debt instruments are a recognised asset class, but to date UK pension funds, in contrast to other European Funds, have only had limited exposure. We believe this is now changing as they clearly have an interest in the long term health of the economy presently threatened by the banking disruption. Loans are an ideal asset class for pension funds as they provide regular income and have a low correlation with equities.”
