UK turnaround investor Endless has launched a new lending arm aimed at bridging the gap between private equity and traditional bank lending markets.
Encina will focus on lending to mid-market businesses with a turnover of more than £5m, providing both asset-based lending and equity investments across all sectors.
The firm, which will be based in Leeds, said it would be targeting companies with debt requirements of £2m and above throughout the UK.
It will initially be funded through Endless, although the partners ultimately expect the business to have its own independent funding.
Endless managing partner Garry Wilson said, “The UK has experienced a significant reduction in liquidity in the banking markets in the past four years and there are no signs of this improving.
“I have seen many good opportunities for a debt provider over this time, which were not suitable unfortunately for an equity investor such as Endless, and it is frustrating to know these businesses weren’t being supported.
“In the same way that Endless was born out of there being a dearth of funding for turnarounds, Encina is being established to address another market space that is not being served.”
Encina director Andrew Ward said, “This is a fantastic opportunity to develop a new and innovative flexible lending business.
“I look forward to working with the advisory and lending communities throughout the UK.
“We have access to funds and can act quickly, I feel this will be tremendous additional resource for UK companies that are looking to grow or restructure.”
Endless has invested more than £240m across over 35 companies since it was established in 2005, and focuses on businesses with turnovers of between £20 million and £500 million.
It achieved a 10.5 times return on its original investment when it sold heavy engineering business DavyMarkham to Indian engineering and construction conglomerate IVRCL in 2010.
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