Funding Circle’s SME Income Fund hits expectations in first year

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Funding Circle’s listed fund announced results for its first year of operation on Friday, performing in line with expectations and increasing net asset value by 11 percent.

The net asset value of Funding Circle’s SME Income Fund rose to £164.8 million, including the £14.5 million in additional capital the group raised in July 2016. Investors received dividends of 6.5 pence per share over the last four quarters, in line with the target of 6-7 pence per share.

The fund, which is quoted on the main market of the London Stock Exchange, launched in November 2015 to give a wider range of investors access to the peer-to-peer platform’s loans.

During the year, Funding Circle participated in a joint project with the European Investment Bank providing indirect exposure to a pool of £125 million of UK SME loans at attractive commercial terms. The group raised around £142 million through a C share issue in April of this year, which will provide expanded funding opportunities to SMEs in the UK, US and Continental Europe.

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Richard Boléat, Chairman of the Company, said: “Over its first full year of operation, the Company’s performance has been pleasing and in line with expectations. We remain focused on providing investors with an attractive risk-adjusted return profile and consistent and sustainable dividend distributions.”

The figures, released on Friday, come just after the lender announced that received full authorisation from the Financial Conduct Authority, putting it in a position to launch an Innovative Finance ISA, subject to approval by HMRC.

Funding Circle is a platform facilitating lending to small businesses from a wide range of investors including 60,000 individuals, local authorities, the UK government-owned British Business Bank, the European Investment Bank and financial institutions such as pension funds.