Validus Capital and Lighthouse Canton Group launched a $20 million fund to finance small and medium-sized enterprises (SMEs) yesterdayan with hopes to grow the entity to $200 million in the next three years.
The LCV Trade Finance Fund will invest in loans that originate from Validus' peer-to-peer lending platform. Validus, a portfolio company of Temasek Holdings' Vertex Ventures, has made disbursements of more than $85 million over the past 24 months.
Lighthouse Canton, an independent asset manager, will bring in accredited investors globally and get them access to the SME asset class.
Given that most financing facilities will be short tenured, the fund will be able to redeploy the capital across multiple SMEs and diversify its portfolio in that way, said a statement.
Mr Chua Joo Hock, managing partner at Vertex Ventures, said he believes the partnership between Lighthouse Canton and Validus Capital will benefit thousands of businesses, with the dedicated fund providing much-needed financing relief to SMEs. "We are proud to be able to support Validus in their mission to be a key catalyst for SME growth. The linking of global capital to the Singapore SME asset class is a sign of strength and belief in the SME ecosystem of Singapore."
Validus said its platform has disbursed more than 1,100 facilities across multiple product types.
It connects with Singapore government-linked entities and private and listed corporates under a pre-approved programme.
This provides SMEs with access to collateral-free financing option.