Maxim Asset Management has launched an income fund that will provide financing to the small to medium (SME) business market.
The business has hired John Krause as an investment manager for the Maxim Income Fund.
The firm's partner, Boston Corporate Holdings, will also provide investment advice to the fund.
Boston Corporate Holdings was formerly a business owned by Credit Suisse First Boston and has experience in SME financing.
"We developed the fund to ensure a mechanism is in place by which investors can support the provision of debt funding to the SME market and get a spread of risk in asset classes in this sector, which should result in more financing opportunities at various levels for SME borrowers," Krause said.
Initially, the unlisted fund will invest in commercial mortgage funding opportunities and subsequently in receivables funding.
"A lot of participants in the SME financing market, including overseas banks, have now left the sector. We are looking to provide support to this market and establish a long-term position in this sector," Krause said.
Financing will also be in conjunction with a major bank.
"We will not be undertaking the financing to the sectors by ourselves," he said.
Krause said it is not too risky to launch a fund in the current environment given that market valuations and changes in the economic environment have already been factored in.
Maxim currently manages a listed property trust.
The launch of the income fund will also diversify the business, Maxim managing director Winston Sammut said.
"We are looking to diversify our business. In this environment it is always a benefit to look at additional income streams," he said.
Sammut said the fund will be marketed to institutional investors.
