Paxton Private Finance is looking to raise £10 million for the second tranche of fundraising for its Paxton Secured Income Fund.
This follows 18 months of operation following a soft launch in April 2011.
To date, the fund’s average aggregate loan-to-value ratio is 53.47% (permitted maximum average LTV: 75%), and the average monthly interest rate is 1.84% (target monthly rate: 1.75%).
The firm provides bridging loans in the UK and is looking to expand its operations with the new fundraising.
The fund’s existing investor base includes high net worth individuals, corporates and sophisticated investors including several investing via SIPPs or SAASs.
“With an increasing number of people looking to use short-term funding in the UK property market, it holds significant potential for investment returns,” said David Kinane (pictured), partner at Paxton Private Finance. “However, these need to be carefully managed and the Paxton Secured Income Fund provides investors with the ability to take advantage of these opportunities confident in the knowledge that strict risk management criteria are in place.
“The fund is designed to provide quarterly returns with the flexibility to withdraw monies after an initial period of 12 months so is likely to appeal to a variety of qualifying investors.”
Kinane told BestAdvice that the firm took a rigorous approach to each loan application. “We have to interview every borrower, and also go with the valuer to evaluate the security,” he said.
“After completion, we meet the borrower and review the security at least once a month.”
So far, the firm has been concentrating on deals in London and the South East, preferring the ‘buy-refurb-sell’ model. It will make both first and second charge loans.