Funding Circle SME Income Fund to Consider Winding Down

The Funding Circle SME Income Fund (FCIF), a fund whose objective is to provide shareholders with a sustainable and attractive level of dividend income by lending, both directly and indirectly, to small businesses through Funding Circle’s platform, may soon be winding down. Earlier this week, the fund’s major shareholders expressed a desire to withdraw their capital and a vote will be scheduled to put this plan in motion.

The decision is not a surprise. The fund suffered a sharp decline in Net Asset Value late last year in part due to increasing business loan defaults.

Funding Circle Holdings (FCH), which trades on the London Stock Exchange, announced that a windup of FCIF would not affect the overall company’s 2019 guidance.

FCH CEO Samir Desai said of the news, “A global income fund providing access to a diversified portfolio of Funding Circle small business loans was the right strategy for investors and Funding Circle in 2015. However, there are now more appropriate and varied ways for investors to participate on the platform. We’re pleased to soon introduce two new investor products to the UK market. They will further expand the universe of investors that can access loans on our platform and continue to diversify our sources of funding, in line with the strategy we set out at IPO.”