Funding Circle's shares dived today as it revealed plans to wind down its small and medium enterprises fund and return capital to shareholders.
Funding Circle SME Income Fund (FCIF) said that after a consultation with shareholders accounting for over two thirds of the register, it had concluded investors did not want to put more money into new credit assets.
Instead it will convene a shareholder meeting to consider the winding down of the company.
This would involve the company’s portfolio being realised and not reinvested.
Funding Circle's shares sank nine per cent to 312p – a far cry beneath its October float price of 440p.
FCIF listed on the stock market in 2015 with the goal of allowing public market investors to invest in a portfolio of Funding Circle’s small business loans.
Funding Circle said it had significantly broadened its mix of funding sources since 2015, and as a result, FCIF has become a declining part of its funding mix.
Samir Desai, Funding Circle chief executive, said: "A global income fund providing access to a diversified portfolio of Funding Circle small business loans was the right strategy for investors and Funding Circle in 2015. However, there are now more appropriate and varied ways for investors to participate on the platform.
"We're pleased to soon introduce two new investor products to the UK market. They will further expand the universe of investors that can access loans on our platform and continue to diversify our sources of funding, in line with the strategy we set out at IPO."
Funding Circle, which floated last year, recently announced the launches of a UK private direct lending fund and a UK bond product.