A special purpose corporate entity is established as a direct lending vehicle (e.g. as a specialist lender to the SME sector) (the “Loan Origination Vehicle”). The Loan Origination Vehicle’s lending business is funded by the issuance of debt securities to investors. The debt securities are secured on the portfolio of loans, which is originated over a defined ramp-up period, by the Loan Origination Vehicle and are limited recourse obligations of the Loan Origination Vehicle. At least two classes of debt securities are issued, with one ranking senior and carrying a fixed coupon and the other ranking junior and carrying a profit-participating type of return. An investment manager (which may or may not be an authorised investment firm) is appointed to manage and effect such origination of loans on behalf of the Loan Origination Vehicle, including to source lending opportunities, conduct negotiations with proposed borrowers, make necessary determinations in respect of the loans comprised in the portfolio over their lifetime, subject in all cases to eligibility criteria specified in a management agreement made between the Loan Origination Vehicle and the manager. The Loan Origination Vehicle would be the lender of record in respect of all loans comprised in its portfolio. All loans in its portfolio would be directly originated by it and not acquired from other lenders, whether on syndication or otherwise. The envisaged structure is similar to a CLO transaction, with the important distinction that loans will be originated directly by the Loan Origination Vehicle, rather than acquired in the secondary loan market. The Loan Origination Vehicle would not conduct any business other than the transaction described above.