LendInvest hits £100m mark for Montello fund

The firm has attracted commitments from institutional investors based in Europe, the Middle East and Asia.

LendInvest has raised £100 million (€115 million; $129 million) for its Montello Real Estate Opportunity Fund as the marketplace lending sector continues to attract interest from institutional investors.

A third of the total commitments in the closed-ended fund were made between January and March, the firm said. Institutional investors across Europe, the Middle East and Asia have deployed capital into the vehicle.

The fund is aiming to raise between £150 million and £200 million overall.

The Luxembourg-domiciled fund is targeting a return between 6 and 10 percent, according to the firm’s website. The strategy targets UK real estate debt investments, underwriting tickets between £1 million and £5 million.

LendInvest specialises in providing short-term financing and since 2008 has lent more than £1 billion.

The strategy was launched in 2014 and had raised £47 million at April 2016.

Rod Lockhart, managing director of LendInvest, said: “In such a consistently low-yield interest rate environment, the hunt for income has never been so strong. We can expect to see private debt becoming an increasingly mainstream component of investors’ portfolios.

“Real estate debt funds, in particular, are well-placed to prosper, despite the hurdles created by the Brexit referendum and the upcoming general election, UK real estate is proving fundamentally resilient,” he added.

MPLs are increasingly attempting to attract institutional investors to the still nascent finance space. In March, LendInvest partnered with the Merseyside Pension Fund on a £12 million investment in a development in Canary Wharf, the financial district of London. The MPL will service the loan and syndicate half the amount to the pension fund.

Last year, Zopa and FundingCircle both completed the securitisiation of loans originated by the platforms in a move to bring over institutional investors to the MPL sector.

Last month, the Peer-to-Peer Finance Association reported growth in lending volumes in the first quarter among its nine members, which includes some of the leading members of the UK MPL industry. Total new lending surpassed £1 billion for the quarter – £636 million for corporates – representing a marked increase from previous quarters.