OakNorth is spreading its roots into the public markets, after it completed its first deal with a listed company today.
The challenger bank has loaned £10m to RM Secured Direct Lending (RMDL), an investment trust which itself lends to small and medium-sized enterprises in the UK.
RMDL will use the £10m to leverage its own debt deals, aiming to increase the returns for its investors.
“[OakNorth] have an excellent understanding of the complex [small business] lending market and the unique needs of mid-market companies that we invest in,” said James Robson, chief executive of RM Capital Markets which manages the RMDL fund.
RMDL aims to provide regular dividends through loans secured against assets such as real estate or plant and machinery, or income streams.
Since listing at the end of 2016, it has invested £68m in 21 loans to businesses such as restaurant groups, healthcare companies and renewable energy firms. Last year, it raised a further £30m from investors to continue its work.
RMDL has previously partnered with OakNorth on two joint loans, including one to finance the development of luxury hotel L'Oscar in central London and another to property company Strawberry Star to purchase and develop a mixed-use site in Wandsworth.
OakNorth launched in 2015 to finance fast-growing businesses, and has now grown its loan book to over £900m. Last year it became cash flow-positive.