UK local authority pension fund Teesside Pension Fund (TPF) has made a 拢40m (鈧�47m) investment as a cornerstone investor in GB Bank, a new challenger bank created to provide UK property development loans.
GB Bank aims to drive economic growth and reinvest in local communities, by lending 拢3bn over five years in property development finance to regional property developers, SMEs and construction companies. It is targeting SMEs requiring 拢500,000 to 拢5m.
The emphasis will be on underserved regional communities, addressing the shortage of funding required to 鈥渓evel up鈥�, and with an initial focus on the North East, Yorkshire and North West.
GB Bank, which received its UK banking licence this week, will also offer a range of fixed-term saving products.
The bank said the lending will support the creation of over 100,000 jobs, 20,000 new homes and 鈥渟everal million鈥� sqft of office space.
GB Bank鈥檚 co-founder and CEO Stephen Lancaster is a corporate manager and leader of business change, with 30 years of experience in IT.
A spokesperson for the 拢5.1bn pension fund told 91传媒在线: 鈥淲e recognised GB Bank as an interesting investment opportunity and made an initial commitment almost two years ago after going through an extensive due diligence process. It was important to give the company certainty of investment as it worked through the complex process of becoming authorised as a bank.鈥�
The investment was made out of its private equity allocation, which represents 7.3% of the pension fund鈥檚 overall portfolio, and was always anticipated to be a medium-to-long-term investment which should ultimately deliver significant positive returns, the spokesperson said.
鈥淚t is also part of the local investment portfolio. For a number of years, the fund has been looking to invest within the Teesside area, provided the investments have an appropriate risk/reward profile, and always recognising that the fund鈥檚 primary focus is its fiduciary duty to its beneficiaries.鈥�
According to the spokesperson, TPF is not expecting any returns for several years when, over the course of time, the bank will be expected to pay dividends, and/or there may be an opportunity to sell part or all of TPF鈥檚 stake.
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