The substantial withdrawal of bank finance seen over the course of the last three years has created a financing vacuum in the UK corporate lending market, and constrained lending practices continue to frustrate business leaders and entrepreneurs.
The downturn, which commenced in 2007 and which has had such an impact on the financial services industry, has led to a fundamental erosion of trust and confidence, and investors are today seeking a differing quality of engagement, new structures and new products.
This new paradigm is creating significant investment opportunities for private capital, according to Cresco Capital.
Founded by equity and lending professionals Charles Owen and Krynauw Kruger, newly launched Cresco seeks to identify investment opportunities for secured lending to primarily unlisted UK companies in need of development capital. The firm’s focus is on achieving a positive absolute return, delivering investments which provide security and yield with opportunities for capital growth.
Owen says: “There is a rich stream of quality businesses too small to tap the corporate bond market but with ongoing finance requirements no longer effectively served by the banks. This financing vacuum has created an exciting opportunity for private capital to structure debt based investments for UK firms on a scale not previously feasible.”
The company has formulated a number of approaches to the corporate lending market, each designed to suit the differing risk preferences and profiles of the private capital introduced. The investment opportunities presented will provide regular income from the interest yield obtainable, returns which exceed those available from cash deposits, security against the assets of the business and a fixed-term, providing certainty of capital return dates.
“These are early days,” adds Owen, “but we are identifying some excellent opportunities and we are attracting strong interest from individuals, syndicates, wealth managers and companies alike.”
Cresco anticipates a new investment fund will be the first of its initiatives to come to market and expects to make a further announcement in the weeks ahead.
