Financially under-served SMEs (small- and medium-sized enterprises) in the UK can now find respite in terms of funding, as BNP Paribas Asset Management (BNPP AM) not only partners with but acquires a 10% stake in European alternative SME credit specialist Caple.
BNPP AM said the partnership is part of enhancing its SME Advanced Solutions platform, which aims to source loans across multiple origination channels such as banks and fintechs, and distribute them to institutional investors like pension funds and insurance companies. Aside from what BNPP AM described as “solid bank infrastructure,” the open architecture platform is also supported by selected partners, including Caple, who will originate loans through their own European network of accountants and advisors.
“The platform will operate within a robust credit risk framework and focus on senior unsecured fixed rate loans of between €0.5 million and €5 million (or £ equivalent),” explained BNPP AM. “It will initially target SMEs in the UK, Germany, and the Netherlands, before broadening out more widely within Europe.”
The SME Advanced Solutions platform is an initiative within BNPP AM’s private debt & real assets investment group.
“This alliance combines the needs of BNP Paribas Asset Management’s investors with Caple’s expertise as an originator of SME loans,” said Stéphane Blanchoz, head of SME Advanced Solutions. “The trend towards disintermediation and the growing need for SME funding creates opportunities for lending platforms, such as SME Advanced Solutions, that can offer alternative credit as a complementary source of finance alongside traditional bank lending.”
Blanchoz continued: “Meanwhile, as institutional investors look to diversify their portfolios and generate higher levels of return than are available in public fixed income markets, they are increasingly attracted to the enhanced yields potentially available from SME lending.”
“Caple’s experienced local market credit teams, partner networks, and proprietary technology, together with BNP Paribas Asset Management’s credit expertise and institutional distribution capability is a compelling combination,” commented Caple managing partner Dominic Buch. “This alliance allows us to effectively address the significant gaps in the European funding landscape by offering access to alternative credit to complement traditional lending models.”
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