First LSE-listed P2P fund launched through island

UK-based peer-to-peer lender Funding Circle has listed its small business investment trust, a closed-ended fund, on the London Stock Exchange.

Industry sources have said the move could be really significant for the emerging fintech sector in the island and, if the fund proves a success, could pave the way for many similar launches and give the local industry real 'first mover advantage' in this area.

It is the first fund structure launched by a marketplace lending platform.

The Funding Circle SME Income fund will allow the company's pool of investors to buy shares in the vehicle, which then doles out loans to a portfolio of small businesses, rather than investing directly in each company under the previous peer-to-peer model. It will also mean that investors can lend money to small firms outside their geographical location for the first time.

Rather than invest in loans directly through a P2P platform, individual and institutional investors can buy and sell shares in the vehicle, which will manage a selection of loans on their behalf.

Mourant Ozannes acted as Guernsey legal adviser and Sanne Group is administrator and treasury services provider for the fund.

Gavin Farrell, partner at the law firm who led its team on the deal, said: 'It is another feather in Guernsey's cap to have been chosen as a jurisdiction for the launch of such a successful, but complex, lending fund platform. Not only was Guernsey and all its service providers able to deal together with the complexity of the transaction, but also with all legal and regulatory aspects associated with the launch of such a funding platform. We are proud to have been associated with such a successful fund launch.'