BNP Paribas Asset Management (BNPP AM) has bought a 10% stake in a new alternative SME credit specialist called Caple as part of a wider strategic alliance.
Caple is looking to fill the European SME funding gap created by a lack of activity among banks and P2P lenders. The firm will target smaller firms in the UK, Netherlands and Germany, with unsecured loans of between £500,000 and £5 million with terms of between five and eight years.
The startup has built a proprietary technology platform facilitating an end-to-end credit application, combining origination by local partner networks of 70 accountancy and advisory firms with an initial credit assessment by its credit analysis teams.
BNPP AM has bought its stake through its incubation fund as part of its establishment of its recently-launched SME Advanced Solutions platform.
The open architecture platform will source loans across multiple origination channels in Europe, including banks and fintechs, and distribute them to institutional investors such as pension funds and insurance companies.
The platform is supported by bank infrastructure and selected partners, such as Caple, who will originate loans for BNPP AM through their own network of accountants and advisors across Europe.
Stéphane Blanchoz, head, SME Advanced Solutions, BNPP AM, says: "This alliance combines the needs of BNP Paribas Asset Management’s investors with Caple’s expertise as an originator of SME loans. 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.
"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."