Rothschild and Cohen back 1bn euro lender start up

Discussion in 'Wall St. News' started by ASusilovic, Sep 5, 2010.

  1. Lord Rothschild, Sir Ronald Cohen and the Australian sovereign wealth fund have committed to invest €450m (£375m) in the largest lending start-up since the financial crisis –offering hope to cash-starved businesses struggling to get credit.

    The two financiers and the Future Fund are backing Haymarket Financial (HayFin), a specialist lender to medium-sized businesses. The commitments take the total capital invested in the company to €1bn, making it the most significant new entrant in the banking sector to date.

    A raft of new banks is being set up, but they are small by comparison. Virgin Money is valued at around £500m, Walton & Co hopes to raise about £100m, Metro Bank has two branches, and NBNK Investments, which plans to buy assets from the part-nationalised lenders and is chaired by Lord Levene, has raised £50m so far.

    Unlike other start-ups, HayFin is not planning to lend to the general public but to businesses with an enterprise value – the value of the debt and equity – of €100m-€500m (£84m-£417m). Companies of that size are too small to tap the bond markets, so are dependant on bank credit.