BNP Paribas Asset Management took a 10% equity stake in alternative credit firm Caple.
The acquisition has been made through BNP Paribas AM's incubation fund.
Caple facilitates access to alternative credit for small and medium enterprises. The firm works with institutional investors to address funding gaps by offering finance to complement traditional bank loans, said a news release from BNP Paribas AM. Financing through Caple typically takes the form of unsecured five- to eight-year loans.
The strategic partnership with Caple is part of the establishment of BNP Paribas AM's SME advanced solutions platform, a recent initiative within its private debt and real assets investment group. The platform, which is open architecture, will source loans across multiple origination channels in Europe, including banks and financial technology firms, and will distribute them to institutional investors.
"This alliance combines the needs of BNP Paribas Asset Management's investors with Caple's expertise as an originator of SME loans," said Stephane Blanchoz, head of SME advanced solutions at BNP Paribas Asset Management, in the news release. "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."
A spokesman for BNP Paribas Asset Management said while the absolute financial amount related to the stake is not being disclosed, it is enough to support the further development of Caple’s existing operations in the U.K., Germany and the Netherlands.
He said Caple originates loans via its network of accountants and advisers, who use the platform to pre-screen and build detailed funding proposals for their own SME clients. These loans will then be included in SME lending strategies that BNP Paribas AM will manage, which will be targeted at institutional investors. The relationship is mutually non-exclusive, giving both Caple and BNP Paribas AM the opportunity to work with other parties, added the spokesman.
BNP Paribas AM has €571 billion ($666 billion) in assets under management and advisement.
