Pluto Finance has raised £500m (€571m) from institutional investors for a UK residential development lending fund.

Blackstone and Clearbell Capital have previously provided equity for the alternative lender, which has been active since 2011.

The new fund will provide senior debt, bridging loans and stretched senior finance to UK housing developers.

Pluto Finance partner Justin Faiz said the company is providing “lower leverage senior debt” with interest rates from 3.95%, which, he said, is “cheaper than the challenger banks, and competitive with the clearing banks but with a much faster turnaround time”. 

Jonathan Morgan, director of investment and developments of Galliard Homes, said the developer is in “advanced discussions to take Pluto’s new senior loan facility on a number of projects”.

Pluto Finance provides senior loans between £3m and £30m up to 60% loan to value (LTV), as well as stretched senior loans between £5m and £50m up to 80% LTV. Bridge loans between £1m and £10m are offered up to 75% of current use value.

The company has recently appointed four staff to its lending team.