This session will examine how SME Finance can be structured and deployed to support local economies at scale, drawing directly on the findings of the new sector deep dive and the practical lessons from our White Paper case studies.

Topics include:

Key findings from the SME Finance Sector Deep Dive
An overview of the UK SME finance landscape, including market structure, risk–return characteristics, and how SME Finance aligns with long-term institutional investment objectives.
SME Finance as a place-based investment opportunity
How local and regional SME investment strategies can support productivity, innovation and quality job creation — and why geography matters.
Delivery models and market perspectives
Insights from private equity, regional fund managers and fintech-enabled investors on how SME Finance is being delivered on the ground.
Implications for asset owners and public-sector partners
What this means for LGPS funds, asset managers, and strategic and local authorities seeking to scale local investing in practice.

Unlocking SME Finance for Local Economic Growth

How institutional capital can drive local growth through SME Finance

Local investing has a critical role to play in supporting resilient, productive and inclusive local economies — while delivering long-term, risk-adjusted returns for institutional investors.

In our highly influential 2025 White Paper, Scaling Up Local Investing for Place-Based Impact, The Good Economy set out a strategic framework for how institutional capital, particularly from the LGPS, can be mobilised to support local economic priorities through private markets investment. A central theme of the White Paper is that investment opportunities originate in places — shaped by local needs, economic structures and policy priorities — and that capital can be deployed in ways that are both commercially robust and locally impactful.

SME Finance is a core pillar of this framework. Small and medium-sized enterprises are fundamental to regional productivity, innovation and employment, yet access to appropriate growth capital remains uneven across the UK. Place-based approaches to SME Finance can help address these gaps, supporting local businesses to scale, strengthening regional economies, and crowding in further private investment.

James Gregson

Impact Fund Manager

Palatine

“SME Finance plays a critical role in enabling ambitious businesses to scale sustainably. For example, we invested in Wealth at Work because it combined strong leadership, a scalable model and a clear social purpose. This backing has seen them grow from 40 to over 450 colleagues, expand internationally, and build a purpose-led business that supports employees, employers and communities across the UK and beyond.”

Francesco Filia

Francesco Filia

CEO and CIO

Fasanara Capital

“As an asset manager at the forefront of SME lending, Fasanara strongly welcomes this paper’s clear articulation of how and why SME finance is a core component of the Place-Based Investment framework and how LGPS Pools can deploy capital to this sector. It sets out a compelling, practical case for how institutional capital can achieve resilient returns while delivering measurable place-based impact across UK regions."

Paul Scott

CEO

NEL Fund Managers

“With LGPS pooling ongoing, this timely paper demonstrates that increasing the supply of capital to ambitious SMEs is critical to unlock regional economic growth, innovation and employment. Importantly, and our experience demonstrates this, it is possible to achieve those objectives and deliver premium risk adjusted returns relative to similar mid-market strategies with important diversification benefits to LP’s looking at portfolio construction. Delivered through regionally headquartered fund managers, there is also the opportunity to build a more resilient, diversified financing ecosystem that is less London centric.”