NEOS, an innovative Netherlands-based direct lender, along with Schroders and KKR, whose contribution accounts for the largest share of the fund, entered the joint venture. The venture will support growing Dutch and German SMEs in the form of alternative and flexible financing. NEOS reports that the fund is the largest direct-lending program within the Europe for SMEs.
With the participation in the fund, Schroders, a multinational asset management company, increases its sake in NEOS to 49%.
The purpose of the fund is, according to Quirijn Haak, CEO of NEOS, to “fill a gap that the banks leave behind.” “Many SMEs can hardly get loans up to EUR 10 million. The new programme meets that need,” he said. Daniel Pietrzak, a partner at global investment firm KKR, said that SMEs form the backbone of the European economy and his company sees much potential in financing this sector.
Growing companies that have proven their value in their respective fields are targeted by the fund.
Head of private investment at Schroders, Alan Cauberghs, said that European SMEs are increasingly searching for debt financing from non-bank actors, “and at the same time institutional investors are getting used to the idea of providing growth finance to SMEs in exchange for higher returns than they would see in public markets”. Hence, he is excited about the proposition of filling the needs of the Schroders’ institutional investors with increasing the company’s stake in NEOS.