Over the past 15 years, led by CEO Francesco Filia, Fasanara has grown to over $6bn in AUM. The firm deploys capital through fintech lending platforms to SMEs. Filia believes that Fasanara offers the asset management industry something that “wasn’t there before”: enhanced technology infrastructure and meeting investors’ continued demand for private lines of credit.
As Fasanara has scaled, the fintech lending market has become more saturated, with Filia estimating there are 40 competitors seeking to replicate its mode. The fund tries to maintain its edge by systemising the process, lending several million loans across its platform. Additionally, the fund tries not to compete with commercial banks who are still responsible for most of the lending within the economy; instead, Fasanara focuses on the middle market, encompassing medium, small and even micro enterprises. These firms are responsible for most of the employment in major economies.
For Fasanara, the upside is two-fold: investments can have a positive social function on the economy and offer durability within a portfolio because of their risk-return profile and varied duration metrics.
Filia believes that this area of the market is underexploited – in some European countries, more than 70% of GDP formation relies on SMEs – and has a “long way to go toward full scalability.” More broadly, Filia believes that funds should build exposure to structural income outside the central banking system, because of the fragile state within the broader economy. Filia envisages a potential scenario of a negative interest rate economy, because of AI labour shocks and overleverage within economies.
Against this macroeconomic backdrop, it reinforces Fasanara’ s focus on fintech lending. When partnering with lenders, part of the fund’s investment process consists of thorough due diligence. This involves looking at several metrics, including the size of the lenders’ book, rate of defaults and the platform’s correlation to central banks’ interest rates. These data points, along with countless others, are then monitored frequently against lender performance.
Despite Fasanara’s unique model, fintech lending is not immune to broader macro conditions influencing credit markets. In a recessive, higher-unemployment economy, there is likely to be more pressure on fintech lenders, as consumer and default rates rise. Filia notes that fintech lenders also contend with having “less regulatory capital set aside and not having the same amount of governance and red tape” compared to large, multinational banks.
Going forward, as Fasanara continues to strive to be a market leader within fintech lending, Filia sees the presence of digitalisation in all areas of the financial ecosystem continuing in the years to come, with more investors “wanting to utilise new settlement systems and technologies offered by blockchain.”
Watch the full alternative views with Francesco Filia below.
