VALIDUS Capital and Lighthouse Canton Group launched a S$20 million fund to finance small and medium enterprises (SMEs) in Singapore on Friday, and hope to grow the fund to S$200 million in the next three years.
The LCV Trade Finance Fund will invest in loans that originate from Validus' peer-to-peer lending platform.
Validus, a portfolio company of Temasek Holdings' Vertex Ventures, has made disbursements of more than S$85 million over the past 24 months. Lighthouse Canton is an independent asset manager.
Lighthouse Canton will, through the fund, bring in accredited investors globally and get them access to the SME asset class. Given that most financing facilities will be of short tenures, the fund will be able to redeploy the capital across multiple SMEs and diversify its portfolio in that way, according to a press release.
Joo Hock Chua, managing partner at Vertex Ventures, said he believes that the partnership between Lighthouse Canton and Validus Capital will benefit thousands of businesses, with the dedicated fund providing much-needed financing relief to Singapore SMEs: “We are proud to be able to support Validus in their mission to be a key catalyst for SME growth. The linking of global capital to the Singapore SME asset class is a sign of strength and belief in the SME ecosystem of Singapore.”
The Validus platform has disbursed more than 1,100 facilities across multiple product types, Validus said. It connects with Singapore government-linked entities and private as well as listed corporates and on-boards their SME vendors under a pre-approved program. This provides SMEs with access to collateral-free financing options for on-going and future projects.