Alternatives investment management firm, LCM Partners, has announced the launch of a new UK-based asset finance lender for the agriculture industry, Rural Asset Finance (RAF).
According to RAF, UK the agricultural industry has stepped up at incredibly short notice to provide food and energy to the nation during the pandemic, which is a tangible testament to its strength and underlines the value of keeping such primary resources vibrant within the UK.
The new venture will comprise of a team of experienced origination, credit and legal professionals who will support the farming and rural customers. The funding for RAFs lending is set to come from LCMs Strategic Origination and Lending Opportunities (SOLO) fund, with an initial investment of £175 million being provided within the next five years.
LCMs SOLO fund is designed to lend into areas including asset finance and leasing by building lasting partnerships with specialist originators, such as RAF.
With LCM providing the necessary funds, RAF will engage directly with the UK agricultural industry, providing specialist asset-backed financing in the form of secured land and property-backed loans to complement traditional hire purchase and leasing equipment finance products.
Specialising in the agricultural sector, RAF noted that the industry has been traditionally under-served and frequently misunderstood by generalist lenders, and now more than ever before requires specialist and professional direct funding support to flourish.
Furthermore, both LCM and RAF stated that they recognise the resilience of the UK farming industry though short- and long-term economic cycles both before and during the Brexit transition and current pandemic environment.
The RAF team, led by Matthew Smart (pictured above), are set to bring more than 5,000 established agricultural industry relationships to access the new funding managed by LCM.
Smart has a long history of working in the asset finance industry, starting his career with BNP Paribas Lease Group as a graduate trainee in 1994. Here, he started building the agricultural lending borrower base with a total book of 2,500 borrowers based in the eastern counties of England.
Then, in 2001 Smart founded Eastern Counties Finance (ECF), an agricultural broker and asset finance portfolio manager with an origination agreement with BNP Paribas. Over the next few years, he set about expanding the company’s origination agreements to include most of the UK institutional funders still active today.
Alongside these developments, Smart began building ECF’s own lending book from the company’s retained profits. This resulted in ECF entering into an agreement with Prestige Asset Management to fund the principal agricultural lending book, building it to more than £200 million in the period between 2008-2014.
In 2014, Smart sold the majority stake in ECF – with its borrower database now in excess of 5,000 UK SMEs – to Prestige Asset Management.
Joining Asset Finance Partners (AFP) in 2015, he built an origination, credit, finance and operations team from scratch operating in the UK rural SME community, culminating in a £100 million wholesale funding programme for M&G Prudential.
Most recently, Smart has been building an independent, end-to-end asset finance business in the UK rural SME sector managing both origination and servicing with high service levels to both the funder and borrower segments. H began this in 2016, and it has now progressed to become Rural Asset Finance.