Loans provided by UK-based direct lending specialist Prestige Funds’ Nucleus Commercial Finance, have now exceeded GBP1 billion (USD 1.3 billion). Nucleus is an important partner for Prestige, managing several dedicated loan portfolios to UK SMEs.
In 2018 Nucleus provided GBP282 million (USD366 million) to SME enterprises, representing a record-breaking year for the firm, including a GBP14.5 million (USD 18.8 million) Asset Based Lending (ABL) facility which helped to secure over 800 jobs in the logistics sector.
Q4/2018 was Nucleus’ strongest quarter to date: the company extended GBP16.3 million (USD21.1 million) in loans. A newly launched (November 2018) portal for independent brokers saw over 900 finance applications in two months. Nucleus was founded in 2011 to provide a true bank alternative to businesses that were getting a ‘raw deal’ from traditional lenders.
“Investor interest in lending as an asset class is running at an all-time high,” says Craig Reeves, Founder of Prestige Funds. “We are now in our 11th year managing funds in this market and continue to see active and new interest in UK SME lending from investors around the world. The ability of firms like Nucleus to source the right deals for our funds and manage risk appropriately is important to the success of this strategy.”
Much of the finance for Nucleus stems from the Commercial Finance Opportunities Fund (CFO), which is a SICAV domiciled in Luxembourg and listed on Euronext Dublin. The fund strategy was launched in 2011 and over the medium term has achieved low volatility and low correlation to traditional equity and fixed income markets. During 2016 several dedicated institutional share classes were launched and continue to attract significant investment from clients in Europe, the Middle East, Asia and South America.
Global assets in direct lending funds achieved a record GBP667 billion (USD867 billion) at the end of 2017, according to data from Preqin. This means that the industry has almost tripled in size since the Great Financial Crisis of 2007/08.
Reeves adds: “Nucleus is staffed with experienced commercial finance professionals who have worked within some of the UK’s largest banking and finance organisations. But beyond that, the team is increasingly providing a consultative role when looking at large and complex opportunities – advising businesses beyond providing a simple loan. The business is also taking an innovative approach to supporting their SME clients, including substantial investment in new technology.”
Nucleus continues to play an important role in providing UK SMEs with much-needed customised financial solutions at a time when many commercial banks are retreating from the market, or pursuing a more rigid, off-the-shelf approach to business lending.
