The bank strengthens its offer for SMEs with more alternative investment options for better financing.
The fund will make some 50 investments, each with maximum maturity of eight years and averaging €10 million to €15 million.
Madrid, 18 November 2020 - PRESS RELEASE
Santander has revamped its alternative investment offer for SMEs, promising up to €300 million from its balance sheet to launch the new Alternative Leasing hedge fund managed by Santander Asset Management. The fund, which has already registered with the CNMV (Spanish national securities market commission), aims to reach a size of €750 million from institutional investors who want to diversify their portfolio with SMEs that are based primarily in Spain but also in France, Portugal and the Benelux region. Most financing will come from sale and leaseback agreements on industrial machinery and equipment (normally in use) on companies' balance sheets and considered critical to business.
Santander’s plan, which builds on its traditional business of new machinery leasing, joins its list of initiatives to provide businesses with funding alternatives to lending. These include the Tresmares platform for businesses with high growth potential, which is run independently by a management team specialising in direct finance, private debt and venture capital; and the Smart Fund, a private debt fund that offers businesses project finance based on sustainability, innovation, digitalisation and job creation.
Alternative Leasing will be managed by Santander Asset Management’s illiquid alternative asset team, headed by Borja Díaz-Llanos. As the first fund of its kind in Europe, it marks a step forward in the asset management company’s alternative investment proposition for institutional investors to branch out from traditional assets.
Santander will be the largest unit-holder in the fund, which will hold approximately 50 investments, each with a maximum maturity of eight years and averaging €10 to €15 million in volume. Its target net return (non-guaranteed) is over 5%, and it may invest in any unrestricted industry (i.e., companies that do not operate in areas with reputational or environmental risk, etc.).
The fund will invest under a risk framework predefined by Santander Asset Management, Santander and its own institutional investors. It will create opportunities for investment and service its portfolio with support from LB Oprent, Spain's leading non-banking platform for raising and managing this type of financing. LB Oprent, in which Santander will take a minority stake, was founded in 2013 by highly experienced former ING Lease officers. Santander’s branch network will also help the fund's ability to attract investors.