This material has been prepared for informational purposes only and should not be construed as investment, legal, or tax advice. It does not constitute an offer, recommendation, or solicitation to buy or sell any security or other financial instrument, nor should any information contained herein be relied upon for the purpose of making investment decisions.
Past performance is not indicative of future results, and the value of investments may fall as well as rise. While the information contained herein is believed to be reliable, no representation or warranty, express or implied, is made regarding its accuracy or completeness.
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The majority of LGB’s Medium Term Note programmes offer an exposure to the UK economy through the leasing or lending businesses of the issuers. The companies issuing these notes are not newcomers to economic volatility. They have operated through Brexit, the pandemic and lockdowns, supply chain disruption and the subsequent inflation shocks. In that sense they are by and large relatively battle hardened.
For a sophisticated private investor, the key consideration is an assessment of the challenges facing the UK economy, and whether current macroeconomic signals threaten underlying credit quality. The pricing of the issues might understate the risk of defaults or instead represent an attractive investment opportunity in risk adjusted terms and in relation to equity investing.
Several indicators merit close attention.
Labour market softening – previously anecdotal – now appears more firmly embedded.
Households are responding cautiously rather than reactively. The savings rate rose to 9.5% in late 2025, compared with below 6% before the Pandemic, suggesting that consumers are building financial reserves.
Consumers appear cautious rather than distressed, which is broadly supportive for credit quality across most SME-focused sectors.
The housing market presents a mixed picture.
Weakness appears concentrated in London and higher-value rural property, while many regional markets remain relatively resilient. Despite the number of homes for sale reaching an 11-year high, national house prices continue to show modest growth of roughly 1.1-2.4% annually, according to the survey you pick, with a relatively strong start in January 2026. Rent inflation has also moderated. At 3.5%, it is now broadly aligned with wage growth.
More pressure is visible on the supply side of the housing market. Developers continue to face elevated labour and material costs, while planning delays remain persistent. Several large listed housing companies issued profit warnings during 2025, with conditions generally more difficult for smaller operators.
This pressure is reflected in the data. Construction insolvencies remain elevated, and according to Construction News, the sector recorded the highest number of insolvencies of any UK industry in 2025 – the fourth consecutive year this has occurred.
Recent inflation data has been encouraging
While the direction of travel is positive, inflation remains only modestly below wage growth. This combination – together with a softer labour market – suggests the Bank of England has scope to accelerate interest rate cuts.
However, SMEs typically borrow at a significant premium to the Bank Rate, so modest reductions in policy rates do not immediately transform borrowing conditions. Absolute rate falls are welcome, but they only marginally improve SMEs’ viability.
Consumer confidence remains subdued but stable.
The GfK Consumer Confidence Index reached its low point in September 2022, coinciding with the spike in energy prices and the market disruption surrounding the Truss administration.
While the sentiment remains negative, the most recent reading is the strongest in over a year, suggesting that the worst of the confidence shock may be behind us. The latest reading is the best for over a year, so perhaps some very small green shoots.
Business sentiment paints a similar picture.
Most surveys show confidence remaining relatively low but gradually improving from the trough reached in late 2024. Importantly, the flash February PMI readings – which tend to act as a leading indicator – show a noticeable improvement in business activity.
(source: Simon French Economics)
Corporate insolvencies remain elevated by historical standards but are now trending lower.
The UK Insolvency Service reported a 14% year-on-year decline in company insolvencies in England and Wales, bringing levels to the lower end of the post-lockdown range.
This suggests that the sharp adjustment following the withdrawal of Pandemic-era support may now be moderating.
(sources: Insolvency Service – compulsory liquidations only: Companies House – all other insolvency procedures)
The operating environment for SMEs is not easy. However, the data does not currently point to a broad deterioration in credit quality – there are actually some bright spots. In several areas – inflation, business confidence and insolvency trends – there are early signs of stabilisation.
For our financial-sector MTN issuers, this is definitely encouraging. Elevated insolvency levels are well understood within the sector and form part of normal credit underwriting, while recent declines – if sustained – are supportive.
The mild improvements in business and consumer confidence are definitely helpful. Anecdotally, there are signs of public sector spending being unlocked which should have a trickle-down effect on SMEs. However the employment numbers are concerning and some sectors – particularly hospitality – are having well publicised pressures. In an environment where the problems are known, as they seem to be, so long as credit pricing remains disciplined, we don’t see a major threat to credit quality. For sophisticated investors willing to assess individual issuers carefully, the UK SME credit market continues to provide attractive yield relative to underlying risk.
Transaction Manager
Alexia Rottet joined LGB in October 2025 as a Transaction Manager. Prior to LGB, she gained real estate experience by participating in the valuation of a property portfolio for A2immo.ch SA as a financial analyst, as well as working at Form Structural Design as an office manager. Alexia holds an MA in Entrepreneurship and Innovation and a BA in International Relations.
Assistant Relationship Manager
Ruby joined LGB in December 2024 as an Assistant Relationship Manager for our investing clients. Prior to LGB, Ruby worked at FHIRST, a start-up where she collaborated with the co-founders on revenue growth and improving client experiences. Ruby graduated with a First-Class degree in History from Durham University.
Finance Manager
Following a degree reading Chemistry at The Queen’s College, Oxford, Antonia trained to become a chartered accountant at a London-based audit firm. She then moved into the tax sector joining EY and completing the chartered tax adviser qualification. She then gained further experience working as a finance director within industry at a family office / hedge fund.
Programme size: £20m
Establishment Date: December 2017
Number of issues: 12
Sector: Marine tracking
Focus: Maritime surveillance and management
Programme size: £25m
Establishment Date: XX 2017
Number of issues: 20
Sector: Financial services
Focus: Loans and leasing
Associate Director
Omar joined LGB in February 2026 as an Associate Director in the Capital Markets team. He brings over five years of experience from NatWest, where he worked across the Leveraged Finance Origination and Portfolio Management teams. During this time, he supported a broad range of businesses from venture-backed to large-cap companies, with a primary focus on the mid-market. His experience was sector agnostic, and the majority of the companies he worked with were sponsor-backed, giving him extensive exposure to private equity-led transactions and capital structures. Omar holds a degree in Accounting and Finance from The London School of Economics & Political Science and is a Chartered Banker.
Adviser
Charles has played an important role in developing LGB & Co.’s investment approach by encouraging a focus on investing in businesses with strong IP or know-how with recurring revenue business models that can prosper throughout economic cycles. Charles brings over 30 years’ experience of investing in privately-owned and publicly-listed small and mid-market companies. He is a director of Larpent Newton & Co. and Hygea VCT plc. Charles qualified as a Chartered Accountant at Peat Marwick, now part of KPMG.
Adviser
Lisa has worked with LGB since 2015 in supporting the on-going cultural and organisational development of the firm, providing advice on strategic people matters. Since 2006, Lisa has been running her own consultancy and executive coaching business, People Possibilities Ltd. Her work is focused on supporting clients at an organisational, team and individual level to enable high performance,improve leadership capability and effect cultural and behavioural change. Previously Lisa has held senior HR leadership positions with Schroders, ABN AMRO and HSBC. Lisa graduated from the University of Birmingham with an honours degree in International Relations & French. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and a qualified Executive Coach.
Chairman
Simon became non-executive Chairman of the Board of LGB & Co. with a focus on growth and strategic initiatives in December 2025. Simon has extensive experience in capital markets and wealth management. He previously ran the client and investment business of Heartwood and became Chief Executive in 2008. He led its well-regarded acquisition by Handelsbanken in 2013. Simon subsequently became NED and Chair of AIM-listed WH Ireland Group PLC. He was also asked to represent the wealth management sector on the FCA Smaller Business Practitioner Panel from 2013-2016.
Capital Markets Director
Fergus advises corporate clients looking to raise debt and equity capital. He is also responsible for the execution and ongoing management of LGB’s MTN Programmes. Fergus joined LGB in 2019 having started his career at Lloyds Banking Group on the graduate training programme, before moving to the Leveraged Finance division, where he focused on transactions with mid-market corporates and PE firms. Fergus holds an MSc in Petroleum Geology from the University of Aberdeen.
Associate Director
Megan joined LGB in 2021 as a Relationship Manager. She is responsible for all day-to-day transactions with investment clients and oversees the LGB Investments Platform and Deal Hub. Prior to LGB, Megan worked at Puma Investments, a tax-efficient investment provider, in the sales and investor services team. Megan graduated from the University of Bath with a Bachelor of Science degree in Psychology, and has obtained the CISI Level 4 Diploma in Investment Advice.
Investment Director
Ivan is LGB’s Investment Director: he is responsible for developing LGB’s investment proposition in the context of the broader market and economic developments. He regularly meets individual company management teams to seek out and monitor investment opportunities. Ivan has served as a senior adviser to the Equity Division of Société Générale, and was previously Managing Director in charge of equity sales for them in London. Earlier in his career, Ivan worked at Morgan Stanley, Lazards and Schroders. He has degrees in history from Cambridge University & London University, and an MBA from Cass Business School.
Managing Director
Simone joined LGB in 2012 and is responsible for LGB & Co.’s business with institutional investors, wealth managers and sophisticated private investors. Simone’s team provides access to a range of compelling investment opportunities with a particular emphasis on structuring laddered portfolios of fixed income. In addition, the team manages portfolios of clients who have entered into advisory agreements with LGB Investments, and advises the fund managers of the Guernsey-based LGB SME Private Debt Fund. Prior to joining LGB & Co., Simone worked in the institutional fixed income department of Citigroup Global Markets. She began her career at Citigroup Private Bank in Geneva. Simone graduated from the University of Lausanne with a degree in HEC, Business Administration. She is a Chartered Member of the Chartered Institute for Securities & Investments and a Director of LGB.
CEO
Cedric was appointed CEO in July 2022 after a period of 18 months as a COO. Cedric spent 15 years working on the energy and commodities sales and trading desks for global banks (BNP Paribas, BAML and MUFG). He gained extensive international exposure, being based in London and Singapore and covering transactions in all geographic regions. Cedric graduated from Global Executive MBA at INSEAD in 2018 and started working in the capital markets space for growth-stage companies. He is also a director of LGB.
Managing Director, Capital Markets
Andrew founded LGB & Co. in 2005 and is managing the Capital Markets team. He has a particular focus on the development of strategic relationships with corporate clients and business partners. Prior to founding LGB & Co., Andrew was a Managing Director at Citigroup Global Markets, where he was responsible for its fixed-income business with private banks and retail institutions. Earlier in his career Andrew worked at Schroders in London and Tokyo. Andrew graduated from Oxford University with a degree in Modern History. He is a chartered member of the Chartered Institute for Securities & Investment.