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Pension investors remain unconvinced about role in SME lending

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Pension investors remain unconvinced about their supposed role in providing financing to small companies, with none of the respondents to a new survey viewing it as a solution to their investment problems.

Repondents said they viewed their level exposure to small firms as right at present, with under a third indicating they wished to increase their holdings.

Asked which channels small and medium-sized enterprises (SMEs) would view as most important in 15 years time to access financing, half said that the firms would  continue to avail themselves of bank loans, the method predominant at present.

Two respondents to IPE’s latest Focus Group survey, covering investors with €68bn in assets, said that direct lending from institutions would be the most important and none believed that securitised lending would play a part.

None of the respondents viewed SME lending as key to solving their investment problems, while 46% said they accepted it could play a part in addressing problems.

The remainder of respondents rejected out of hand any part played by direct SME lending, with one UK fund stating that investments must remain focused on return, rather than assisting business growth.

A second added that funds should not be regarded as banks.

However, a Portuguese investor did not reject the idea out of hand, simply noting that many such investments were not rated and therefore required research expertise to invest in such loan books.

For more on the Focus Group, see the current issue of IPE

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