Loans: New players target mid-market opportunities
New funds target mid-market; Funding gap persists
loans to SMEs due between 2011 and 2014
The recovery in the syndicated loan market in recent months now shows signs of filtering down to the mid-market – which will be good news for small and medium-sized enterprises that have been starved of credit during this crisis. The high-yield bond boom that has poured liquidity into the funding market for larger corporates has not been available to SMEs – 85% of loans to which are due to mature between 2011 and 2014. Several new entrants – conscious of the funding gap that persists in this part of the market – are now setting about taking advantage of it. One such player is HarbourVest, which launched a new fund at the end of April to invest in senior secured loans to mid-market companies backed by private equity.
"The primary market has changed dramatically in the last nine months," says Alex Rogers, managing director at HarbourVest Partners in London. "In April 2009 the market started to open up and transactions are now happening."