US-BASED investment group Ranger Capital will today unveil plans to raise up to £155m to tap the growth of direct lending platforms by listing a new fund on the London stock exchange.
Ranger Direct Lending Fund, which will list on the main market, will use the cash to snap up loans made to small and medium-sized businesses by a host of alternative financing platforms. The group hopes the rising tide of non-bank lending to businesses will allow it to buy loans which perform better than normal fixed income products.
Ranger Capital boss Scott Canon said: “Bank lending cutbacks triggered by the financial crisis and resulting regulation have created a void which direct lenders are ideally placed to fill. The Ranger Direct Lending Fund is the first UK listed fund of its kind to offer permanent capital to the established and emerging direct lending platforms as they expand to fill this void.”
Liberum is co-ordinating the listing, which is set to be one of the last floats in London before May’s general election.
Ranger, which is based in Dallas, Texas, said about three-quarters of the loans it expects to buy will be secured by commercial assets or personal guarantees. It aims to spend about £500m buying up loans in total. So far the group has signed agreements with seven US lending platforms, with five more in the pipeline.
The company said it was targetting dividend payments which equate to a yield of 10 per cent a year on the share issue price.