The emergence of OnDeck on the public market brought a new wave of attention to the alternative finance market. The company saw a $200 million debut when it emerged just a week after Lending Club’s own IPO.
Now, another alternative lending platform has gone public, though this time to more muted fanfare. Ranger Direct Lending landed on the London Stock Exchange, debuting with a valuation of about $204 million, according to the Financial Times. The company, which began trading on Friday (May 1), acts as an investment trust that invests in alternative loans.
According to reports, Ranger Direct Lending is the third alternative lending trust to debut on the LSE in the last year, after VPC Specialty Leading Investments and P2P Global Investments.
Ranger Direct will be focusing on business lending rather than individual finance, with a plan to launch asset and invoice financing in the U.S. with expansion in other countries later on. The company charges a 1 percent annual management charge and a 10 percent outperformance fee, and will borrow up to 50 percent of businesses’ net assets, reports said.
According to the fund’s parent company Ranger Capital Group, Ranger Direct Lending chose a U.K. debut because of investors’ greater familiarity with the P2P and alternative lending industry.
The U.K. has become a world leader in the development of the alternative finance industry. While small business suppliers show greater demand for supply chain financing options as their large corporate buyers burden them with late payments, alternative lenders have risen as a viable option to big bank lending, which is considered less accessible and affordable, especially to SMEs.
A newly enacted regulation will require mainstream banks to refer small business borrowers to an alternative lender in the event that they are rejected for a loan, another reason why the U.K. is a hot-spot for alternative finance.
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