Legal & General has become a strategic investor in Pemberton.
Legal & General has become a strategic investor in Pemberton Asset Management Holdings Limited ("Pemberton"), as it launches a new Direct Lending platform for institutional investors. Pemberton through the new platform will provide much-needed loans and private placements to mid-market companies in the UK and Europe, focusing on companies with a turnover between €100 million and €1 billion.
Legal & General has subscribed for a 40% equity stake in Pemberton, and made an initial commitment to invest €250 million in Direct Lending through the Pemberton platform to UK and European corporates, with the intention of making further significant commitments to the platform in future.
The investment in Pemberton and the allocation of funding for loans and private placements enables Legal & General to accelerate its participation in the direct lending market, providing a new source of institutional funding to corporates over the long term.
Legal & General believes that for UK and Europe to grow and succeed, businesses need access to different types of funding. As a long-term provider of capital to UK PLC, Legal & General sees a role for itself and other long-term institutions to provide such funding, and believes its investment can be a catalyst to help stimulate a thriving loan and private placement market.
Economic Secretary to the Treasury, Andrea Leadsom said: "Direct lending and private placements offer real new sources of funding to help businesses grow. I am therefore delighted to offer my support to Legal and General's announcement today."
Commenting on the investment, Paul Stanworth, Managing Director of Legal & General Capital said: "The UK and Europe have been too dependent on bank financing, and this impacts particularly on businesses wishing to invest and expand. Creating a new channel to deploy longer-dated institutional money in the mid-market sector will help drive economic recovery at a time when bank balance sheets are constrained, as well as creating a further asset class for direct investments by insurance companies and other institutions."
Symon Drake-Brockman, Managing Partner of Pemberton, said: "We have developed an independent institutional platform to appeal to those major insurers and other institutions who wish to offer much-needed funds to mid-market companies in the UK and Europe. Through our platform, we will enable the mid-market to access funds from established institutional investors at a time when the number of loans available from banks is in decline. Legal & General is an ideal partner in this enterprise due to its long-term investment horizon and focus on supporting the real economy."
Nigel Wilson, Legal & General Group CEO added: "We have now made ,~4bn of direct investments in UK infrastructure and housing - 'slow money' with long-dated investments out to 50 years. Bringing together our financial and investment resources with the specialist skills of Pemberton Asset Management enables us to grow another much-needed asset class. Creating an institutional private placement market for growing mid-caps - as already exists in the US but not here - brings new diversity to corporate funding as well as delivering good risk-adjusted returns for investors."
Pemberton is an independent alternative asset manager that blends asset management and banking expertise. It brings together credit underwriting and risk management capabilities through a platform that tailors institutions' investment needs with mid-market credit opportunities. Loans will be originated directly via the firm's on-the-ground presence in key European markets and its network of regional bank relationships.