HAYMARKET FINANCIAL, the recently-established small business lender, has raised €450m (£375m) from Lord Rothschild, Sir Ronald Cohen and an Australian fund.
HayFin was set up last year to extend credit to young businesses with enterprise values of between €100m and €500m. It is run by former Goldman Sachs partner Tim Flynn and boasts non-executive advisers such as Simon Palley, the ex-chief executive of private equity behemoth BC Partners.
HayFin received seed funding from a consortium led by buyout firm TowerBrook and including Canadian pension vehicles Omers and PSP. The fresh round of fundraising from Rothschild, the banking magnate, venture capital pioneer Cohen and Australia’s Future Fund brings HayFin’s market capitalisation to €1bn.
The institution will use leverage to lend up to €3bn to small and medium-sized enterprises (SMEs), around three quarters of whom will be in the UK. The move comes amid a drought of credit for middle-market businesses. According to the Bank of England, £62.6bn of bank lending has been withdrawn from companies since January last year. Politicians including chancellor George Osborne have repeatedly exhorted banks to step up their lending to SMEs.
While other start-up banks such as Virgin Money have targeted consumers, HayFin’s model puts it closer to projects such as Aldermore, the SME lender backed by Anacap.