M&G cashes in on credit gap with loans for UK mid-cap firms

M&amp;G, the asset management arm of Prudential, said yesterday that it has raised over &pound;1bn for a new fund aimed at lending to mid-cap companies in desperate need of financing after the collapse in bank lending.<br /><br />The launch of the UK Companies Financing Fund (UKCFF) will match companies in need of refinancing with investors such as pension funds and insurance companies, which are in need of the steady investments.<br /><br />Businesses will be offered loans in the form of bonds with a minimum five-year term, while investors will receive an &ldquo;attractive rate of interest&rdquo;.<br /><br />Chancellor Alistair Darling backed the fund, saying it is &ldquo;a useful step in the right direction&rdquo;. M&amp;G, which has &pound;134.bn in funds under management, said it has already seen an enthusiastic response to the idea.