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Institutional investors predict growth of SME asset-backed securitisations

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A new study reveals that seven in ten (69 per cent) European institutional investors believe there will be an increase in the issuance of SME finance-related asset backed securitisations (ABS) over the next two years.

The research was commissioned by Amicus Finance Plc (“Amicus”), a leading specialist in short term lending solutions which last week completed a GBP100 million short-term mortgage-backed securitisation. The study showed that three-quarters (73 per cent) of institutions believe there will be growing appetite for investing in securitisations providing access to SMEs’ underlying cash flow assets.
 
Investor types most attracted to SME securitisations are likely to be insurance companies, private sector pension funds followed by private equity investors and hedge funds, according to the study.
 
When asked to identify which cash flow assets will be most in demand among institutions, 53 per cent of investors selected traditional property finance, closely followed by trade finance (52 per cent), leasing (44 per cent) and property bridging finance (44 per cent).
 
Given the continued high demand for property bridging finance spurred on by the buy-to-let market, 60 per cent of investors anticipate growth in demand for short term syndication of this debt through bond issuance.
 
John Jenkins (pictured), CEO of Amicus, says: “Investors are clearly bullish about the prospects of the SME securitisation market and this is welcome news to specialist lenders such as Amicus which last week completed a GBP100m short-term mortgage-backed securitisation to broaden our funding sources. 
 
“Many long term investors see the attractions of accessing the rapidly growing non-bank SME lending sector and with greater standardisation and transparency we are likely to see greater numbers of securitisations coming to the market.”
 
Amicus’ first GBP100m short-term UK MBS (mortgage-backed security), Amicus Mortgage Finance 2015-1, is a regulated non-rated entity with a scheduled maturity of July 2018, comprising a portfolio of quality short term loans with a weighted average loan to value of 60 per cent; the term of the loans ranges from 6-18 months.
 
Amicus offers short term, property-based lending solutions to private and corporate borrowers, which include landlords, developers and owner-occupiers.

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