Singapore-based small- and medium-sized enterprises (SMEs) financing platform Validus Capital and asset management firm Lighthouse Canton Group today announced the launch of the LCV Trade Finance Fund.
Dedicated towards financing SMEs in Singapore, the fund was launched with an initial asset of S$20 million (US$15 million) and aims to raise S$200 million (US$150 million) in the next three years.
The fund aims to finance at least S$1 billion (US$744 million) of existing S$20 billion (US$14 billion) unmet financing gap faced by SMEs in Singapore.
“With the launch of this fund, we will bridge this gap between demand and supply which until now was being intermediated by the banking channels. This investment, while offering better returns than similar duration fixed income investments, will also allow investors to diversify their fixed income portfolio outside of large corporate exposure,” said Lighthouse Canton Group Co-Founder and CIO Rajesh Sundaresan.
Backed by Vertex Ventures through its Series A funding round in July 2017, Validus Capital is a platform that connects SMEs with private and listed companies and Singapore Government Linked Entities.
Within the past two years, the platform claimed to have disbursed over S$85 million for SMEs in Singapore.
Through the fund, Lighthouse Canton Group will bring in accredited investors globally and get them access to this asset class via Validus’s platform for their portfolios.
In a press statement, the company said that since most financing facilities will be short tenures, the fund will be able to redeploy the capital across multiple SMEs thus creating diversification in the portfolio.
In an interview with Dealstreet Asia, Validus Capital Co-Founder and CEO Ajit Raikar announced plans to launch the platform in Indonesia in July and another undisclosed country in January 2019.
The company is also looking forward to raise its Series B funding round by the end of the year from a “few” startegic investors.