Investors tap into ‘Indian summer' for non-bank lending funds

As pressure grows on banks to restart lending activities, buyers are warning the window of opportunity on private lending funds may soon be closing, writes Julia Rampen.

Fund selectors buying into private lending funds are at odds over whether European Central Bank (ECB) action will bring to an end an ‘Indian summer’ for the asset class. Private lending funds have enjoyed a surge in interest as investors seeking higher yields at lower volatility take advantage of vehicles filling the gap. These have been created by banks’ increased unwillingness to provide companies with credit post-crisis. Typically offering investors yields in excess of 5%, the funds have stepped in to meet the needs of property developers, businesses, and others looking for loans, ...