With this week’s launch of the British Business Bank’s figures showing bank lending to SMEs in 2017 was down by £2.3bn on 2016, Mayfair based private equity house IW Capital has launched it’s new report showing that a fifth of investors are now choosing SME investments over traditional stocks and shares.
Looking to circumvent cumbersome banking structures, an increasing number of SMEs are also turning to alternative finance organisations to fill the funding gap.
Tech-sector breakdown of investment intentions in 2018
60% – Investments that benefit society
59% – Energy tech
58% – Med-tech
48% – Fin-tech
Ethical concerns influence investment decisions
- Over 12million (24%) investors would now refrain from pursuing an investment decision because of their personal or ethical concerns surrounding the nature of the product or service
- 36% of investors now believe the ethical, social or environmental impact of the company they are investing into is just as important as the financial return
- A third of London based investors and consumers would now hold back on investment decisions because of their own moral or ethical concerns about the company, a 50% increase on the number of people in the regions who would make the same decision
The headline figures also reveal:
- A fifth more 18-24 years olds olds are looking to invest in SMEs to deliver social change in 2018 than the over 55s
- 54% of investors do not know what knowledge-intensive, in an EIS context, means
- Investors in London are twice as likely (29%) as the regions (12%) to prefer investing in SMEs, rather than stocks and shares, as an actively conscious investment choice
- 47% of 18-24 year olds would invest in fintech in 2018, compared to 39% of 35-54 year olds and only 34% of over 55s
- 1 in 5 people in the UK with between £75,000 and £100,000 in investable assets are now considering knowledge-intensive companies as an investment option due to the Chancellor’s doubling of the EIS cap
Luke Davis, CEO of IW Capital said of the results:
“The UK investment population now navigates a landscape of opportunities that demand a far greater sense of responsibility than that of a decade ago. An increase in the level of education and awareness available, not to mention opportunities that were traditionally reserved for larger institutions, has meant that our investment decisions no longer sit in isolation from our personal lives. Instead, these decisions now directly influence the society we live in. The results are both encouraging and a definite call to action for industry partners across the nation to acknowledge what is a significant shift in investor sentiment, ensuring we respond to it effectively with education, effective guidance and forward-facing opportunity”
