Fireside Chat: Industry Insights
Industry Insights Fireside Chat
Peter Wilson, CEO, British Business Bank Investments
Moderated by Christine Farnish, Chair, P2PFA
Mr. Wilson is the CEO of the investment branch of the British Business Bank (BBB). BBB was created to combine a number of strategic lending initiatives. Despite being a public institution that employs taxpayers’ money, BBB has a conventional board and publishes a five-year plan.
BBB is active in a number of segments, including startups, growing businesses and SMEs. BBB does not lend money directly but rather works through the market to support lenders and investors who provide capital to UK SMEs.
When asked why BBB got involved in P2P lending, Mr. Wilson spoke about the bank’s mission to support the UK economy, which has a very concentrated banking sector, and where small businesses struggle to get access to credit. BBB felt their support was needed to boost this fragile lending environment.
Mr. Wilson emphasized that because BBB is working with taxpayers’ money, they need to transparent about their investment criteria. BBB uses nine criteria to assess every applicant, which can be found on the BBB website, Mr. Wilson said.
BBB has £1.5bn of capital that is managed by 10 fund managers. Typical investment size is between £10 and 15 million.
Mr. Wilson said it was a challenge at the beginning to convince people the risk that BBB took with taxpayers' money was appropriate. The institution worked together with credit rating agencies to assess the loans against rating agencies’ criteria.
Mr. Wilson compared the UK to other countries in terms of public sector investment private markets and stated the Uk was playing catch-up to other European countries such as Germany, where KfW has been lending to the private sector for a long time.