The short-term lender partners are Bridge Capital, Century Capital and Mayfair Bridging.
Yasin Patel, director of Mayfair Bridging said FCA authorisation was a requisite of the partnership since talks began earlier this year.
“We are hoping for funding of £300m split between the three firms, over the next three to five years, with £30m in the first 12 months,” said Patel.
No single lender will have more than 50% of the funding available at one time, according to the firm.
The target launch date for the fund, named TB Walker Crips Income from Short Term Lending fund, is 1 August. It will be managed by James Allen.
The income is generated through interest on capital charged on the loans provided to borrowers seeking short-term funding on UK residential property acquisitions or conversions.
Allen said the FCA had been very helpful during the two-year fund set-up and said he thought the regulator is very aware there is an opportunity to introduce more regulation into the bridging industry.
But he said the prognosis for the market was strong.
“There is a massive property market, which is rarely satisfied by mainstream lending. I’m not quite so confident about the optimism of many about the upturn in bank lending. We see the continued pull for capital adequacy requirements and I still consider it a fairly weak sector.”
He continued the key to FCA authorisation of the fund was its use of three bridging firms instead of a single firm, with a fourth to be agreed in the next 9-12 months.
Alongside authorisation, the hurdles all three firms overcame included suitable persons requirements, clear business models, proven broad broker coverage, the fund’s own due-diligence and a willingness to open up its records to scrutiny, said Allen.
He continued: “In today’s low interest and growth environment, an income of 8.4% is an attractive proposition for investors who continue in their hunt for yield. This fund aims to provide a predictable and sustainable level of income for investors and some much needed capital to property developers.”
The fund is a Qualified Investor Scheme and as such as only available to eligible investors, with a minimum initial investment of £20,000. The investor charge for the fund will not exceed 2%.
