Bridging & Commercial Magazine — Interview Special

ISSUE 12 NOV/DEC 2020

SPECIAL You spoke, we listened

This issue is dedicated to the late Benson Hersch, who always lent an ear

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Acknowledgments Editor-in-chief Beth Fisher beth@medianett.co.uk Creative direction Beth Fisher Caron Schreuder Sub editor Andrea Johnson Sales and marketing Caron Schreuder caron@medianett.co.uk Contributing photographer Alexander Chai alexanderchai.com contact@alexanderchai.com Instagram @chaialexander +44 7908 856 688 Illustration Valf Sam Needham Amy Winbolt Special thanks Marcus Dussard, Hampshire Trust Bank Mike Hue, Embassy Financial Services Curtis Goring, The Aftersales Network Kelsie Tune, Tillison Consulting Charlotte Rutter, Roma Finance Leah Brunskill, Market Financial Solutions Doina Becker, Lansons Marc Meneaud, Together Alexander Nye, Stanton Jonathan Prince, Allica Bank Katrina Hindley, TAB Printing The Magazine Printing Company Design and image editing Russ Thirkettle, Carbide Finger Ltd Bridging & Commercial Magazine is published by Medianett Ltd Managing director Caron Schreuder caron@medianett.co.uk 3rd Floor, 71 Gloucester Place London W1U 8JW 0203 818 0160 Follow us:Twitter @BandCNews | Instagram @BridgingCommercialMagazine

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he troubling year that was 2020 is coming to an end—and things are already looking up for the 12 months ahead. The positive news around promising vaccinations and the temporary lifting of restrictions over Christmas has indeed lifted spirits, even if the chancellor’s Spending Review fell short for many.

In Q3, we saw a record £7.6bn of bridging applications, yet supply still seems to be lacking—completions fell short by almost 28% on the same period last year. However, since the last issue of Bridging & Commercial, we have reported on numerous new entrants, recruitment drives, and record lending figures, signalling our sector’s resilience and its ambition to drive forward, and an indication that the market may indeed see completions rise to meet demand in 2021.

None of this progress would be possible without the motivation and determination of the people within our industry, which is why we decided to dedicate this issue to them.

Our Interview Special combines the insight and opinions of those we couldn’t wait to know more about, and who we hope will inspire.

When a new challenger bank—built for the mass affluent—recently hit the headlines, we snapped up an interview with two of its chiefs to discover how it will carve out its place in an already crowded market. It’s a Monument-al read [p52].

On [p8], we speak to one of the industry’s most likeable cohorts, Roma’s Nick Jones, about making his mark again after 30 years, and, on [p24], we sit down with Blaise Commercial Finance’s new business development director, Claudine Reynolds, who paves the way for a new breed of approachable brokers.

Glenhawk has gone from strength to strength this year, having secured funding from JP Morgan at the onset of the pandemic, and launching its first regulated bridging product after getting FCA approval. The lender’s leadership team reveals to us its latest plans [p32], which includes product expansion with another stateside backer—you won’t want to skip this one.

Have you ever wondered what the UK bridging market looks like from the US? We have, and that is why we asked Toorak Capital Partners’ John Beacham for his thoughts on British bridging, its appetite for backing our lenders in 2021, and the key distinctions in both markets. I am sure our broker readers will have their own opinions on the differences in distribution… [p12] Elsewhere, we ask Marc Goldberg and Pete Ball our (and your) burning questions [p44] about decisions they have made since March and what ‘Together 2.0’ will really look like, and, on [p60], we question why the industry remains relatively silent on the subject of racial equality in the workplace.

We have covered interviews in all areas of the specialist lending market, so that there’s something of interest for everyone to read over the festive period.

Normally at this time of year, the Bridging & Commercial team would have had our diaries filled with festive events and activities, and at least one person would have forgotten to bring in their Secret Santa gift to the office party. While this won’t be a ‘normal’ Christmas—although I will be quite content bingeing season four of The Crown in my PJs and skipping the annual screams of “Collusion!” over the Boxing Day monopoly session—we wish you happy holidays with your loved ones, and a well-deserved rest. You’ll need it—after a year of great reflection, 2021 must have some exciting opportunities in store.

Beth Fisher Editor-in-chief

3 Nov/Dec 2020

‘I may be the first, but I will not be the last’ is something we might hear a lot more in the coming years p60 4 Bridging & Commercial

8 12 20 24 32 44 52 60 68 72 74 76 80 84

Nick John Carol Claudine Glenhawk Together Monument It’s time Rebecca Statement of intent East of England Paresh Duncan Limelight

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Nick Jones

Nick Jones

Making my mark again Nick has been a mainstay in the bridging and commercial sector for as long as I can remember, and stands out as a welcome, familiar face wherever you go. Universally likeable, Nick merges his natural ability and almost three decades of experience as a relationship specialist with his genuine enthusiasm for this market. He joined bridging lender Roma Finance in August, after over 20 years’ tenure at Together and, excited for this next adventure, is off to a flying start Words by

caron schreuder Illustration by

Amy Winbolt 9 Nov/Dec 2020

Nick Jones

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re-engineered Roma to take on new growth opportunities. “We have also implemented a department that supports the new business team with more technical underwriting and decisioning on day one, to ensure stronger conversions of enquiries and big increases in productivity,” Nick expands.

I ask him for his views on staying competitive in such a busy space, and he maintains that broadening what you can offer is crucial.

“2008 is where that diversification started,” he explains. “A lot of intermediaries started to look at different product areas … expanding what they offered. And I think that lenders should be doing the same.”

Widening one’s product range also opens opportunities to work with more distribution partners and, therefore, increases lending prospects. “It allows you to have more conversations—if they’re thinking about you on commercial, they may think about you on residential or BTL.” Within bridging, the commercial strain isn’t as widely available as its residential counterpart. Nick advises that Roma’s foray into this product area was born out of a clear demand from the marketplace.

“When Main Street goes to Wall Street … it’s time to sell,” he says, referencing the fact that when something becomes popular, you’re likely, at some point, to get edged out on price—so you have to seek out other opportunities that are less saturated. “But you’ve got to understand the risk. You can’t just go out there and say, ‘We’ll do on commercial what we do on residential.’”

As to why more providers are not actively looking at commercial bridging, Nick chalks it up to two possible reasons: the relative difficulty in obtaining funding for this lending area, and the lack of available comparables. “The high street lenders don’t run towards commercial lending, particularly certain sectors; it carries increased risk,” he explains. “If funding isn’t available directly from them … then there is even less chance of them letting somebody else lend their money out. In this part of the market, pretty much everything is individual, which means you have to consider the customer as much, if not more, than the asset.”

Roma has always followed a customer-centric approach to lending, placing the specifics of the case at the heart of its decisions, not just the asset value. This may account for its confidence in tackling a new market where a more bespoke attitude is required.

Nick also highlights that the commercial property market is far more aligned and influenced by the economy, compared with residential—something that can scare lenders off. Plus, there are complexities such as boundaries, covenants, restrictions, and class

here was so much in this conversation that I wish I could print for the sheer entertainment value— the transcript had me in tears of laughter—but Nick has made me swear to keep our ramblings off the record.

This warmth and hilarity must be part of his appeal with brokers, and why he is such a coup for Roma. In his role as commercial director, he has full autonomy to further shape and grow the lender’s rapidly evolving strategy for success.

Having known Scott Marshall, Roma’s managing director, since their days at Together— an organisation that Nick is incredibly proud to have been synonymous with—he was thrilled to grab the opportunity to really make a difference in a burgeoning business. “It was really Scott as an individual that I bought into,” Nick shares.

“I see a lot of characteristics in him that I see in myself, around passion for the business and wanting to do things right . . . it’s the perfect match, and a role that I’d always backed myself to do, in a company that I felt was ready for it,” he adds. He describes the scope of his responsibilities at Roma as encompassing the distribution piece as a whole, including business and product development, and marketing.

The Manchester-based lender has made significant strides since its launch in 2008 and, more recently, handled its brief Covid-related lending hiatus earlier this year in admirable fashion—coming back stronger than ever with several enhanced aspects to its offering, including technology and, of course, Nick’s appointment.

Making such an important career move during a pandemic has its challenges, and Nick recognises that leadership is just as important now as it has ever been. With the world encouraging renewed focus on health and wellbeing in the workplace, Nick made a point of meeting each member of the team maskto-mask, in order to get a real sense of they wanted. “Everybody is part of the journey and, if you can collectively get them on board, you will get there quicker, with less bumps in the road,” he believes, crediting Roma’s solid culture of engagement for his relatively smooth transition.

Nick’s top directive is growth—increasing distribution and completions. So far, he has ushered in a commercial bridging proposition, improved loan criteria, increased funding, and strengthened the lender’s broker/packager panel relationships. In August, Roma recorded its highest month of completions and has seen a 100% rise in activity overall this year (a fact I had to prise out of Nick, due to his self-effacing nature). To underpin all of this progress, a brand refresh is set to be revealed in the new year.

The deeper emphasis on relationships has 10

Bridging & Commercial

Nick Jones

Greggs to the motorway, Caron”).

Looking ahead, in relation to his relationship building responsibilities, Nick—who is a huge proponent of in-person meetings—predicts that video calls may be the new gatekeepers for those somewhat infamous BDM drop-ins. Safety and social distancing measures notwithstanding, brokers discovering that they can get product updates just as easily via Zoom (albeit minus the doughnuts) will possibly create a more selective approach to office visits in our market.

“You’ll start to see, from a relationship point of view, which business development and key account managers have got the relationships with brokers—those they like, trust, and want to work with,” he details. He goes on to assert that the measure of a good BDM may now be dictated by their ability to, quite literally, get through the door.

One outcome of the crisis, in Nick’s opinion, is a heightened focus on, and requirement for, alternative, specialist forms of finance.

Generally speaking, due to widespread economic hardship and a decrease in banks’ risk appetites, more people will fit less of the mainstream providers’ criteria, putting them in a position to consider more flexible options.

“No doubt there will be more specialist lending opportunities coming out of this . . . there is still a big chunk of intermediaries and club and network members who don’t consider this—and they’re looking for a certain type of customer,” he says, musing that education is paramount and, as long as banks’ centralised underwriting systems continue to replace actual underwriters, the specialist market will flourish.

Throughout our conversation, Nick put forth several nuggets of wisdom that I’ve been thinking about since we spoke, and that I believe are worth sharing. One is the idea that good businesses are always open to adaptability, not just in times of global emergency.

Competition, distribution, funding—this can all change in the blink of an eye. However, he did concede that “when something of this sort of magnitude comes along, that’s when businesses really show their mettle and ability”.

Secondly, when we chatted about Roma’s brief pause in lending and how it was managed, Nick highlighted the importance of truly knowing your business—what it can and can’t do, and what the best course of action is for it. When I complimented Roma’s transparency during that difficult time, Nick responded with humanity: “Communication is king; how you make people feel is exceptionally important.” Given how many businesses and individuals are frayed and exhausted from the trials that 2020 has thrown at us, perhaps we’ve got to make everything that bit more personal in order to succeed.

use. “Everyone is very specific about the types of properties that they want to lend on. It’s not just the kind of property, but also what it’s being used for. It really does matter.”

To illustrate that point, Roma won’t for example, lend on an operating pub, but will do so on one that is going to be converted and renovated. That is the lender’s sweet spot: properties that need work to make them mortgageable.

The commercial bridging product—which goes up to 60% LTV, with interest rates starting at 1.10%—is currently available for up to 12 months, however Nick envisages that this will continue to develop. “The next goal is to expand that product like we’ve done with the BTL and try to extend the term, but it all comes back to funding at the moment,” he comments. “A lot of people are wary of Covid and its impact in the future, so, in trying to obtain funding, you’ve got to show and prove yourself. We’ve done that very successfully with BTL.” Given the present amount of uncertainty surrounding exit plausibility for these kinds of deals, I am interested in how Roma is able to get comfortable with writing this type of business. “Experience comes into play, as well as how the potential borrower has managed during the pandemic,” Nick states. “A business that has adapted and innovated is going to be perceived in a positive light, especially as we underwrite the borrower before the property.”

Nick’s optimistic slant on what he calls the countercyclical commercial market is owed in part to his perception that people now want more ownership over their income, and the emergence of ‘side hustles’. He considers this evolution likely to drive demand for different types of office space. “I think that the future of this sector will always be there, whether it’s in conversion or refurbishment, or just restructuring the property that we have,” he says.

In the first few weeks since unveiling its commercial bridging product, Roma has witnessed “an awful lot” of conversion and refurb requirements, partially spurred on by the new permitted development rights. A recent case of theirs that stands out is the funding of the transformation of a 1920s shopping mall near Bristol into a row of terraced houses, modernising the properties but maintaining much of the exterior art deco aesthetic.

Another scenario signifies the lender’s willingness to consider a facility for what is typically underserved: land for commercial use. Nick regales me with the tale of how Roma assisted a borrower who had bought some land with the intention to regenerate it, obtain planning permission, and lease it to Euro Garages (an enterprise that, incidentally, Nick considers a national hero: “They took 11

Nov/Dec 2020

12 Bridging & Commercial

Words by

BETH FISHER Illustration by

VALF

13 Nov/Dec 2020

John Beacham

T’S 4PM, RAINING, AND ALREADY STARTING TO GET DARK,

so I feel a tinge of envy when our webcams turn on and Toorak Capital Partners’ CEO and founder, John Beacham, appears, smiling, and seated next to tall, sun-drenched windows with leafy views from its HQ. It’s 11am his side—in Summit, New Jersey.

While we have never met in person, I first spoke to John over the phone two years ago, when we had a long and candid discussion about funding models, which made its way into the inaugural issue of this magazine. I was instantly fascinated by the correspondent real estate loan investment platform, and how it was making waves in the UK and US bridging sectors by acquiring and managing bridging loans directly from lenders.

Globally, it has bought in excess of 14,000 loans (totalling nearly $5bn), and its current book sits at around $1.9bn.

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John Beacham

different. He boldly references Darwinism: “The birds on one island have red feathers, but they have blue feathers on the other . . . they just evolve differently.

It’s not like there’s an inherent reason for it.” I probe him further on what the main disparities are between the two nations in terms of risk ideology. “If I asked 50 UK bridging lender CEOs one simple question: ‘Do you think it’s riskier to have a bridging loan or a refurb loan?’ every single one of them would say, ‘A refurb loan is definitely much riskier, because you’re having to complete the works,’” he replies. In the US, the opposite perception is true.

Another big distinction is the way that interest is calculated. Almost the entire US bridging industry uses ‘current pay’—which we call serviced loans—where the interest is paid by the borrower each month. This would be unusual here, they are mainly offered as rolled up or retained. “I didn’t know how many ways there were to calculate interest, until I read through 10 different UK bridging lenders’ loan documents,” John laughs. “If you put CEOs from US and UK bridging companies into a room, they would come to blows over which structure is better,” he jokes.

The influence of brokers in the two homelands varies significantly, too. John’s opinion on the matter is forthright. “A broker is way too powerful in the UK. They get paid a lot of money, their margins are very high, and they control a huge percentage of the business . . . frankly, in a way that I think is unhealthy, in that they get too much of a margin.” In contrast, he feels that bridging lenders earn too little. He claims that brokers in the States get paid half of what brokers here are remunerated. Does this mean the US has less need for intermediaries? John estimates that around 80% of volume comes from brokers in the UK while, in the US, it’s around 50–60%. “Especially in the refurb market.You have much more direct [business in the US], because you have a lot

When Toorak entered the UK bridging landscape in early 2018, John noticed that when lenders were raising funds, the vast majority were doing so with private money from friends, family or HNW investors; securing warehouse facilities from banks; or, if they were large enough, completing securitisations. “There was no ‘whole loan market,’” he claims. He also recognised that there was very little standardisation, unlike in the homogeneous mortgage and BTL spaces.

Consequently, Toorak entered the UK scene with a set of guidelines showing lenders the exact credit criteria that it wanted to buy— which has, to date, been pure bridging and refurb loans. John explains that the benefit of this was to create consistency across multiple originators throughout the country, which has ultimately given Toorak a better portfolio “because it’s all underwritten to a consistent standard”.

John points out that the whole loan funding model is also a much better use of a bridging lender’s time, rather than the effort of dealing with multiple investors and banks. “Right now, the typical CEO in the industry is spending half their time dealing with investors and the other actually lending. We free them from that,” he expands. “We can let them do what they’re good at—understanding their customers and markets and originating loans—while knowing that there’s consistent capital in the background that we can provide for them.”

He describes the UK and US as having a similar dynamic in terms of lots of lenders doing their own thing [ed: although it is estimated that there are between 400 and 500 in the States, which is probably fourfold what we have—it seems we both lack real data], with similar funding approaches; they equally lack an institutional force that compels them to conform.

However, he brings to light that the mentality around how bridging products work and the philosophy of credit risk are fundamentally

A BROKER IS WAY TOO POWERFUL IN THE UK. THEY GET PAID A LOT OF MONEY, THEIR MARGINS ARE VERY HIGH, AND THEY CONTROL A HUGE PERCENTAGE OF THE BUSINESS …

FRANKLY, IN A WAY THAT I THINK IS UNHEALTHY, IN THAT THEY GET TOO MUCH OF A MARGIN”

15 Nov/Dec 2020

John Beacham

THERE’S NOTHING LIKE A SHOCK TO REALLY FIGURE OUT WHAT’S GOING ON IN YOUR BOOK”

how Toorak can evaluate the track record and loan book performance of prospective partners amid such upheaval. “We have our own book,” he responds, “so we know what’s happening to our loans, and we own a lot of them in the two markets.” Basically, it has a good sense of where credit performance should be. “We can say, ‘We know how we dealt with it, how did you?’”

For its own loans, John explains that Toorak goes through a process of figuring out the real issues, what the needs are, and what the financial situation is, and makes a judgement based on this. “That’s how we’ve approached it, and people who have considered it the same way ended up performing okay.”

He poses the following questions: how did the lender adapt? Are they just doing what everyone else is doing? “I’ve seen lenders have 40% forbearance or payment holiday rates, and I have lenders that have low single digits, going through the exact same process,” he discloses. “Are you going to be really thoughtful about it and actually evaluate the situation and do the right thing?”

He adds that there is no better test than a crisis. “I only know of a couple of lenders in the US who actually started before the 2008 financial crisis and are still working now,” he divulges. “There’s nothing like a shock to really figure out what’s going on in your book.”

John feels that situations like this reveal which lenders are solely looking at property, and which are truly underwriting borrowers.

I quiz him on how the UK and US bridging sectors have coped, adapted, and evolved during the pandemic. He details that there was a period when both pulled back significantly in terms of lending volume due to the uncertainty. He believes that those lenders that have kept their employees and structure, while using the time to focus on improving their processes and procedures, are better positioned than those that reacted late and are now trying to “scramble to get back to where they were before”.

of repeat customers who aren’t doing one deal; they tend to be professionals who do five in a row.”

Interestingly, he references how the UK’s biggest bridging lenders control a much larger chunk of the sector than the equivalent top lenders in the US, potentially indicative of our more fragmented environment.

Despite the differences, Toorak’s approach to both is the same. It sees its highly selective partnerships with lenders—it rejects at least five for every one it approves— as long-term relationships. “We spend a lot of time getting to know them up front and understanding who they are,” John imparts.

Before Covid-19 changed life as we knew it, John would travel to the UK and spend a lot of time meeting people, alongside Toorak director, Tim Marsh, who is based here. The process works like this: Tim will do a series of calls to figure out lenders’ underwriting practices and whether there is a segment that fits the platform’s credit box. The pair then look at credit performance, track record, number of completed loans, the delinquency rate in the portfolio, and recoveries.

John describes it as almost like dating. As with most serial daters, this is followed by proper due diligence sessions, which include Toorak spending a day with a third party learning about a particular lender. John tells me that the full process typically takes between one and two months, depending on how eager the lender is.

While the pandemic has caused several restrictions and mass uncertainty, it doesn’t show when I dive into questions about the platform’s appetite. It currently funds circa 60 lenders in the US, and was buying loans from eight bridging lenders in the UK last year. As of October, Toorak had 14 lenders selling it loans, with an additional four that are in the process of being onboarded. “That’s the scale and size of what we’re doing in the UK,” he confirms.

Considering the growth, I ask

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John Beacham

John deems that, in both nations, the coupons for bridging loans have historically been high enough for lenders to make an attractive return on their own, but he doesn’t think this will continue.

“Yields will compress to a point when you need to have . . . some sort of access to institutional capital in order to compete.” He even foresees the nature of the bridging industry transforming into something that looks more like the traditional mortgage arena.

While this may play out naturally and steadily, John envisages that, in the immediate term, bridging lenders will be focusing their time on building their volumes and looking at ways to speed up the delivery of loans, which are now averaging at more than 50 days. “Doing that in a world where there’s not enough infrastructure, staffing and support makes it hard, because all the machinery is clogged up to some extent,” he states.

So, what sort of qualities does a lender need to possess if they want to become a Toorak partner next year? “Number one, we want to see an established record,” he responds.

He adds that the character of the individuals in the company is also important, along with their credit discipline, operations capability, and a team to produce consistent, high quality loans that are all underwritten to a good standard.

“We really look [for] people who are credit-oriented and really focused on getting the best loans.”

It seems that there are still opportunities to be had—especially for lenders that think laterally about their offering. While Toorak’s focus in the UK has been solely on residential bridging and light, moderate, and heavy refurbishment loans to date, John lets slip that the firm is plotting its British expansion with a few different products. Therefore, worthy bridging lenders that are already in, or are eyeing the refurbished rental property, BTL, or groundup development arenas, may have a helping hand in due course.

John also highlights how both had previously been set in their ways in terms of technology, but have been “forced” to change, and are now using efficiencies such as electronic file sharing and virtual meetings with borrowers.

It is evident that anything that saves time will be integral to bridging lenders right now. John describes the current situation in the UK and US mortgage industries as “super employed” due to the low interest rates, with many queuing to get a conventional mortgage. “All the people who know how to do mortgages can get a job.” Whereas, in the bridging markets, we have seen some businesses shedding staff, and this could easily lead to a drop in service levels across the board.

John clarifies that being in the middle of a crisis sucks up all the air. “There’s a lot of rethinking around how we did things in the past and trying to come up with better ways of doing it without necessarily reducing our credit standards.” He references how lenders are now approaching valuations, as an example.

He predicts that, going forward, the UK bridging space will see some consolidation, especially as institutional backing, like Toorak, widens its reach. He also anticipates an evolution away from peer-topeer funding (which he claims has also happened in the US), and from small funds, such as HNW investors and one-off, loan-by-loan finance. “[Lenders] that have access to cheaper funding are able to grow their businesses and become really successful over time—they tend to get a higher percentage of the market,” he notes. “I think the differentiation between those which have good capital and those who don’t will become more pronounced,” he illuminates. The ones without are likely to either cut their credit standards and lend on worse deals in a frantic bid to compete or will become more marginalised. Neither of these options tend to lead to success, and therefore it is probable there will be fewer lenders coming out of this.

“I THINK THE DIFFERENTIATION BETWEEN THOSE WHICH HAVE GOOD CAPITAL AND THOSE WHO DON’T WILL BECOME MORE PRONOUNCED

17 Nov/Dec 2020

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Accelerating the pace of change in construction

Carol Massay

Carol Massay is known as a respected adviser to the construction sector. With over 30 years’ experience in the industry, she brings a vast accumulation of expertise and observation, at every level, to her current role as CEO at EasyBuild. Passionate about understanding the dynamics and challenges experienced by people working in this everevolving industry, Carol is firmly positioned to be part of the solution—and change perceptions industry wide

A

junior accounts role at national housebuilder Barratt Developments is where it all began. After that, Carol joined a civil engineering firm that allowed her to experience the wide range of construction schemes undertaken there. It was during this period that she discovered an interest in data and project control information.

Having worked as a financial controller, she developed an understanding of the time spent each month in collating information from site to produce costs for the business. It was with this insight that, when it came to implementing a new business system, she had the knowhow required to help the site operational team and, importantly, provide the critical financial detail needed. Carol was consequently headhunted to continue this type of work on a bigger scale at a construction software house, providing systems to numerous top 100 contractors.

After 14 years here, she joined EasyBuild in 2015, with the objective to strengthen the business’s presence, compete with software firms, and explore expansion into other applications. The awardwinning Enterprise Resource Planning (ERP) reporting software prides itself on being suitable for all facets of the wider industry, including civil engineers, main contractors, demolition, fit out companies, infrastructure, housebuilders, and maintenance and service providers—if it forms part of a project, this platform will work.

During what Carol calls the monthly

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lifecycle of the project, costs are constantly monitored. “At the end of each month, the commercial team and head quantity surveyor will value the four weeks’ work and apply to the client for the application for payment,” she explains. “What makes us stand out is the cost/value reconciliation process within our software, allowing you to go into the project at any time and track progress and profitability.”

Carol is seeing enquiries coming from companies who want to enhance their reporting capabilities, and those who have outgrown Excel spreadsheets and crave additional visibility—something that is particularly desirable in today’s market of relatively unpredictable timelines and extenuating circumstances.

The EasyBuild software—which is said to be “built for construction, by construction”—is complemented by a suite of supporting applications, such as mobile timesheets, goods received notes and requisitions, and has become extremely useful in this socially distanced era from a communications point of view. “In the past, you’d have site engineers coming into the office on a weekly basis, bringing in documents,” Carol states. “With EasyBuild, you just need your mobile phone to input the information, and it gets sent.”

When Carol was brought in to define the structure of EasyBuild, she had “the luxury of knowing what good looks like in a business”, having previously worked for so many years

Carol Massay

Words by

caron schreuder

21 Nov/Dec 2020

Carol Massay

at a major construction software provider. Despite the challenges sometimes presented when trying to attract skills into a small business, she has successfully assembled a team of experts—some of whom she managed previously, which means that they are familiar with her style and she knows what they are capable of.

I address the responsibility that Carol might feel, working in a male-dominated sector, towards encouraging more women to consider getting involved in it. “When we have been recruiting, consciously, I’m hoping that more women will apply and look at construction software as a good career path,” she shares. “I will continue to advocate for this.”

According to the latest ONS report, as of September 2020, women made up just 13% of construction workers in the UK—a figure that has in fact dropped Given that there is a very real slightly in the past labour skills shortage that is three years. Sector likely only to be exacerbated misconceptions and a lack of flexibility have as we work through Brexit, been cited as barriers encouraging more women into to improving these this sector may no longer just be numbers, and the rate a ‘nice’ thing to do . . . it could be of cultural change appears painfully imperative to its survival slow. The trope of the burly, hard-hatted macho man on site is difficult to get out of one’s mind when considering the sector’s potential for welcoming women. A blog post on EasyBuild’s website posited that: “The problem lies in the current perception of the industry, as well as course providers and companies failing to attract women.” It believes that advertising for these positions is often targeted at men.

Given that there is a very real labour skills shortage that is likely only to be exacerbated as we work through Brexit (somewhat faded from focus right now), encouraging more women into this sector may no longer just be a ‘nice’ thing to do—I believe it could be imperative to its survival.

Carol considers the government’s support of the construction sector during the pandemic to have shown it to be a hugely necessary, resilient, and positive space to be in, and hopes that this might drive interest. “Women in business, like myself, need to put themselves forward and say, ‘It’s not a challenge; it can be done,” she asserts, and thinks that men who are at the helm of their businesses should not wait for someone else to pick up the mantle of improving diversity, but get stuck in by presenting their workplaces as inclusive. “Interview the women that they already have, whether it’s in finance, on reception, or out in the field, to explain what really goes on and how great it can be.You can put a lot on paper, but seeing is believing.”

She also urges construction, as an ageing sector that contains so much expertise, to push apprenticeships and appeal to younger people via effective use of social media which “drives their decisions”.

Carol’s involvement as a speaker and presenter for the Women in Construction & Engineering (WICE) Awards 2019, and head judge in September this year—an occasion that recognises exemplary leaders and encourages more women into the sector through its nominations process— affirmed her view on how important representation is.

She had the honour of bestowing Roni Savage with the Best Consultant award in 2019, and remembers the winner sharing an anecdote along the lines of: “When I

first showed up to site as an architect, ready to discuss things, they looked at me and said, ‘Who are you? I’m not taking instructions from you.’” Roni has gone on to become a widely recognised face in construction, is ubiquitous online and on TV, and is policy chair for construction at the FSB. WICE has reported more submissions year-on-year, demonstrating that there is a demand for showcasing female talent and expertise.

While Carol’s overall attitude to female-specific workplace obstacles is that she has found ways of overcoming bias by keeping her head down, when pressed, there is a particularly infuriating instance that comes to mind.Years ago, she found herself—encouraged by management who wanted to leverage her excellent client relationships—in a sales role. Although this was not her natural proclivity, she smashed targets and, somewhat expectedly, began raising eyebrows among her male peers on the team. She recalls being regularly singled out and challenged on her work, despite her above-average performance. Fortunately, this has never held her back from enjoying working in the sector.

Back to the present, Carol is far more comfortable using her innate talent for networking. In order to keep her finger on the pulse and EasyBuild moving in the right direction—with the help of a very engaged development team—Carol is huge on relationship building. “I speak to my customers at C level to find out what their challenges are as a business and what is happening, but also what their clients are enforcing that is impacting them.”

As a regular feature at industry roundtables, Carol can stay ahead of changes in business modelling, contract types, policy changes, and so on. “I’ve been elected to be on the Business Application Software Developers Association, BASDA, a collective of software houses providing technology for construction … that is making sure that we’re aware of what’s coming downstream around government policies, HMRC, and the like,” she says.

Being immersed in the market informs Carol of what should be next on EasyBuild’s agenda. “We’ve introduced our suite of mobile technology, which is key, and our analytics which allows information on the business to be accessible from a secured web browser. We are always listening to our customers’ needs and keeping our eye on what is required in the ever-changing realm of construction reporting.”

In light of more scrutiny being placed on sustainability within the building sector, I ask Carol whether EasyBuild has aspirations to play an active role in facilitating a greener future. “Yes, we are definitely looking at it.

At the end of the day, the system is there to provide information, and it’s how that information is used that’s going to protect the environment, indirectly.”

The platform enables a much more accurate advance view of stock levels and requirements, leading to less paperwork, deliveries, fuel, and waste.

On the overall pace of progress within construction, it has been dubbed the ‘dinosaur of technology’, partially due to a certain mentality that favours investing in the build itself, rather than the supporting processes.

But things are gradually improving—helped along, no doubt, by ambassadors such as Carol who are actively trying to shift how we perceive the sector and serve as the necessary role models for what is ultimately a space with so much potential for growth and evolution.

£100,000,000 LENT

WHO IS

CLAUDINE REYNOLDS?

Words by

BETH FISHER Illustration by

Sam Needham

Claudine Reynolds

B

laise Commercial Finance’s

new business development director is not your standard broker. While her pink hair, jeans and trainers are the first things I see as she greets me from her sun-drenched conservatory, what I learn quickly as we converse is that she’s approachable and, simply, down to earth. “I don’t tend to do suits,” she laughs.

“For me, your appearance doesn’t dictate your experience, or your ability to transact a deal.” She believes that her personality and being a “massive kid at heart” truly appeals to people—and she’s right.

“Historically, property investors went to their bank wearing their suit and tie and expected to have an in-depth monetary discussion with the manager about investments,” she says. “Investors have moved on.” Today, many of Claudine’s clients are typically younger than her and don’t want this type of interaction. They turn up to meetings in casual attire and expect the same from their brokers. A lot of investors she talks to are buying BTL properties before even considering a home of their own. “I met a property investor recently who rocked up in a battered car with a sweatshirt on, and had to dash off because she’s got the school run,” Claudine tells me.

“She’s incredible at what she does, and she likes— just as I do—not conforming to that stereotype.”

Claudine feels that new-to-market investors want someone who talks to them on their level, who can have a genuine conversation that doesn’t just revolve around money or loan terms, but still has a great grasp of the property market and the ability to place secured debt. “That, for me, is how the industry is changing, and how it needs to continue to change— because investors and property people have.”

She firmly believes that there is an importance for new blood in the brokerage market. “There’s plenty of work to go around, and the more adaptable, approachable brokers who move with the market will be able to reap the benefits,” she says. “Who says pink hair and tattoos don’t fit in?”

Claudine joined Blaise in September to boost its presence in Manchester, complementing the firm’s current coverage in Bristol, West Midlands, Thames Valley, London, Wiltshire and Devon.

When I scanned the brands she had worked at over the past 20 years, I was surprised we hadn’t met before—I mean, I do know everyone.

Claudine’s career in financial services started

when she was just 18. Taking after her mother, who was working at Lloyds at the time, she decided to join HSBC’s outsourcing team. “I loved the fact that I was working for a big brand,” she reminisces.

However, while it felt like the right place to work, she wasn’t convinced it was the place for her.

Adamant not to become another FTE, she left to join mortgage network Sesame Bankhall Group (called just Sesame back then), starting in its contact centre. Involved with all internal departments, Claudine gained a rounded understanding of how to deal with IFAs and mortgage brokers on a wide range of issues, from simple IT problems to having a complaint lodged against them. This is where she came to know the real workings of a broker.

“I really wanted to be a team leader,” she admits.

“I wanted to manage people—I’ve no idea why, but I did.” Her ambition was realised when she was promoted to be Sesame’s complaints team leader, based in Huddersfield. For the next couple of years, she dealt with the processing and packaging of complaints against regulated advice (everything from endowments to mis-selling) for advisers to review.

After that, she became a general insurance sales team leader, where she managed the internal sales team.

“They were all dead young,” she tells me, with her only a few years their senior. “It was a really cool team.”

When Sesame merged with Bankhall, Claudine was made redundant. While she didn’t know it at the time, she now considers it to have been the best thing that could have happened to her career.

“When you work for a company for 11 years, which I had, you become quite institutionalised,” she says. This is when she joined specialist lender Together as a business support manager for direct applications in the unregulated commercial space. She worked solely as the go-between for the underwriters in the office and the business development team on the road to help build the relationships and smooth transitions for applications to happen. “Wherever there was a stumbling block, it was my job to get rid of it,” she explains.

“Why did you change paths and get into broking?”

I ask. As a single mum, she wanted a better worklife balance, and to spend more quality time with her son and girlfriend. “I was always there, but I was never really present.” In November 2018,

26 Bridging & Commercial

Claudine Reynolds

“THERE’S PLENTY OF WORK TO GO AROUND, AND THE MORE ADAPTABLE, APPROACHABLE BROKERS, WHO MOVE WITH THE MARKET, WILL BE ABLE TO REAP THE BENEFITS” 27 Nov/Dec 2020

Claudine Reynolds

“I DON’T THINK YOU CAN BE SHY WHILE YOU WAIT FOR THE PHONE TO RING—BECAUSE IT DOESN’T. YOU HAVE TO BUILD YOUR OWN NETWORK” the opportunity arose to work with ex-Together colleague Paul Chadney, who had started his own commercial mortgage brokerage, Capisce Finance, specialising in sales and acquisitions in the UK caravan park industry. “I thought, ‘If you [don’t] take a risk, you never know, do you?’ So I did.”

She admits it took her the best part of a year to get used to not sitting in front of a screen for nine hours a day, and to realise that work is based on output, not how long you spend doing it. She’s now a complete convert and believes that if you give yourself a finite time to do your work, you’ll do it. During her two years at Capisce, she built a strong base of clients in Manchester. “I spent as often as I could networking, meeting new lenders, reaching out to surveyors, corporate solicitors and estate agencies,” she says.

However, when the first lockdown loomed, Claudine was worried about whether she would still be needed if things got quiet. While she started assessing her options, she came across a post on LinkedIn from Blaise, announcing that it was looking to expand. She had known its directors, Jay Greatley and Aled Morris, since her days at Together and through Paul, and it piqued her interest as they specialised in development finance—an area she was keen to explore. After just a couple of conversations, she was made part of the team.

Her journey before moving into broking gave her

a broad grasp of business, experience of all types of financial advice, and knowledge of what a lender really needs as part of an application. For those interested in becoming a specialist finance broker, she feels that getting experience at a commercial lender first is key, especially when it comes to understanding the differences between regulated and unregulated lending. Yet she advises not to switch between the two. “I wouldn’t necessarily recommend a regulated broker to go into unregulated business,” she cautions, suggesting that it’s difficult to change the “frame of mind” of how you work and process things. Instead, she suggests teaming up with a broker that you trust and that offers what you don’t. For example, Claudine works with a mainstream mortgage broker and says that the business they pass between each other is “incredible”.

Claudine’s next learning curve involves getting to grips with property development—an area she thinks has huge potential in the next two to four years— having mainly worked in the bridging and commercial spaces previously. Blaise predominantly serves this sector and Claudine will be working closely with Jay and Aled on joint applications so that, six months down the line, she will be able to approach cases on her own. “I’m already [establishing] contacts in [this market]: building companies, QSs, commercial surveyors and commercial estate agents,” she says.

28 Bridging & Commercial

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I ask her what her goals are in her new role and she flinches. She’s not hugely into financial targets or achievement milestones. Instead, her main objective is to preserve her current life and keep sight of what’s important. “For me, it’s all about continuing to remember why I did this. And why I did this is to maintain my work-life balance—to be able to walk my son to school and pick him up two days a week. That’s all I ask, two days a week.” She doesn’t want numerous holidays per year, or to be working from Cannes. “That’s not what I’m about.” When she picks up her son at three o’clock, she won’t check her emails until he’s in bed. “I didn’t get that from my mum, because she worked full time,” she divulges. “I want him to have that time from me.”

With multiple lockdowns, working-from-home adjustments, and virtual fatigue, in addition to pent-up demand for home moves contributing to 62% of specialist finance brokers working over 45 hours per week, I ask Claudine whether this year has made it more difficult to achieve her desired balance. “I’m very regimented about the hours I keep. I also have a no-phone policy at the weekend,” she replies. She explains that she keeps to a set list of things she aims to achieve each day, which maximises productivity in the hours she works.

“I think the other thing to pick up on is the fact that I’m really close to the lenders that I use,” she

adds. In other words, she knows when lenders are changing criteria early, not after it happens. “If somebody comes to me with a transaction, I want to already know where I’m going to be placing it while they’re on the phone to me,” she explains, rather than waiting for a lender’s BDM to email her the latest offering. “You want to be proactive.”

Would she recommend broking to others looking at building a career in this market, and for those who may want to generate their own work while enjoying a better harmony with their personal lives?

“You have to be a certain type of person to be a broker,” she answers. “I don’t think you can be shy while you wait for the phone to ring—because it doesn’t.You have to build your own network.” She illuminates that you have to be motivated every Monday to get up, get dressed, and go out and meet anybody and everybody to create your own business.

“I don’t know how many times I’ve sat here and thought, ‘I’ve gone self-employed. We’re in a pandemic … I’ve got to keep a roof over our heads.’

And then I feel slightly sick and say, ‘You need to stop thinking like this.’” She says that a broker will keep moving forward—but it does take a particular mindset. “I don’t think it’s for everybody.”

Claudine pauses and taps her dining table/ work desk twice. “But, for me, hopefully, touch wood, touch everything, it’s going to work.”

29 Nov/Dec 2020

HE COMPANY

L-R Nick Hilton, Guy Harrington, Gabriella Rees, Damani Johnson

YOU KEEP

Words by

caron schreuder Photography

alexander chai

In our very first issue, we ran an exclusive interview with Glenhawk entitled The Billion Pound Dream. Achieving such a lofty ambition takes a lot of hard work and diligence—but it’s getting closer.

Since launch, the specialist lender has placed steely focus on establishing an enviable team and infrastructure, and obtained FCA authorisation earlier this year. Becoming something of a darling for US investment, Glenhawk has attracted funding from JP Morgan and, more recently, an additional stateside backer, effectively increasing its ability to branch into more areas of specialist real estate lending

I

Glenhawk

n early November, I was joined

by CEO Guy Harrington, COO Damani Johnson, managing director Nick Hilton, and head of marketing Gabriella Rees, to discuss the strange year that was 2020, and the strides that Glenhawk has made in pursuit of its goal to exemplify high quality, borrower-centric lending.

Caron Schreuder: There’s been a lot of activity at Glenhawk this year.

Given the current environment, it doesn’t seem like you’ve stopped or had too much difficulty—how?

Guy Harrington: The last seven months, for most of the world, has been pretty chaotic and worrying. Looking at bridging and how it was created out of the global financial crisis with the retrenchment of the banks and the slowdown in credit supply, if we selfishly talk about our sector, then it’s clearly a space that will do well.

When lockdown first happened, however, there was a hell of a lot of uncertainty there. I think everybody in the company felt that and we didn’t really know what would happen. Especially with the real estate market being locked down for such a long period and transactions not really happening; not being able to visit people’s homes; valuers not going in; and having to rely on AVMs and so on—it wasn’t an easy time. Did we find it challenging? Definitely.

But I think it’s a space that thrives in times like these when mainstream credit freezes up. In terms of the group, we didn’t shoot the lights out and lend as much as possible or raise our LTVs to get market share during lockdown; we just slowed down … we didn’t want to take any unnecessary risks. So, we lowered our LTVs slightly and pulled in our commercial lending. Nick did a great job of sitting down with us all and advising the best course of action, which included slowing down new enquiries—a very hard thing to do. We were really just being cautious because, in unprecedented times, you can’t afford to make mistakes because it will all unwind when the loans mature in nine or 12 months. Here, there has been a lot of stabilising, which I think has been the theme across the whole market and, of course, bringing in new funding and strategising products that we want to launch over the next two to three years. More recently, we launched our regulated product and entered Scotland on an unregulated and regulated basis.

Nick Hilton: In lockdown, we stripped back LTVs and were cherry-picking deals while working with brokers that we’ve got a level of trust with—we wanted 34

Bridging & Commercial

to continue to lend. We had two record months in terms of redeeming, in a market that wasn’t meant to be moving . . . which was obviously very positive because it showed the quality of our lending thus far. It was important that we continued to lend because, from a morale perspective, the underwriters were very busy during this time and my concern was about the motivation of those working remotely.

I’m a big believer that, as a lending unit, you’re much more effective when you work together because you soundboard each other and you problem solve as a group.

We had our team calls scheduled three times a day. It worked well for a period of time, and I think, coming out of lockdown, everyone was really keen to get back, refocus, and be together. So, yes, we did a fair bit of lending throughout the lockdown period. Obviously, we worked very closely with JP Morgan on how we would mitigate that risk and create some forbearance for clients at the backend as well because, of course, the stress wasn’t just about new lending—it was also on the redemption side of the business. So, all in all, we were able to keep a level of momentum and get on with what we wanted to do, which was the growth and book building. 2020 should have been the year when Glenhawk was looking to do £20m-plus a month, and that’s what we wanted, but lockdown came and we had to implement internal measures to make it work for us. Bearing in mind, we’d just signed a new funding line with JP Morgan in early March. So, there was that early relationship to work on to make sure that if they were going to give us flexibility in certain areas of the way we do things, then we needed to give back as well. We weren’t trying to create market share or beat other lenders to deals throughout that period, because we didn’t feel that was the right thing to do. One, because we wanted to be cautious and, two, we didn’t want to lend on assets that were potentially going to cause us problems and, three, like everyone, we wanted to see what it would look like when we came out the other side. We’ve been branded as too small to really go out and originate and, to be quite frank, that’s probably our strongest area of the business. We’ve got over £50m from application through to underwriting in the last four weeks.

This has meant that we have needed to continue bringing people on board. So, if anything, I think we’ve come out the other side with a greater market share.

GH: I think that answer has filled up at least six pages of this… [laughter]

35 Nov/Dec 2020

36 Bridging & Commercial

Glenhawk

NH: Damani, Ella and Guy, you can all go home now. [more laughter] CS: I was wondering if you were just getting everything out of the way so you could go home... But there are a couple of things I want to pull out of your comments. We have learnt throughout this crisis that it’s actually the back books that have been the major challenge for bridging lenders. Maybe it took something like this to highlight the quality that was possibly lacking in some lenders’ processes and approaches; you apparently did not have that issue. What do you take from that into 2021, regarding your approach to borrowers and quality?

Damani Johnson: I think the key here is that we’ve always lent on not just the asset, but the borrower. That has really benefited us during this whole lockdown period. It’s really evident that the way we do things and how we underwrite works.

And also, on the backend, we are very fair with our clients. Because we weren’t quick to threaten lawsuits and LPAs etc, our borrowers tend to work with us. If there was an exit that was struggling, the borrower played ball because of our approach and how we decided to deal with them . . . and if that meant reducing the asking price for a sale, they went out and did it; if it meant that we needed to look at the deal internally to get it working and provide some flex, then we did it.

NH: We are constantly trying to improve . . . and, of course, when you bring on an institutional funder like JP Morgan, they expect all of these holes to be filled on every single level. The way we’ve underwritten the loans from start to finish has obviously improved over time and I think, again, it’s a testament to the teamwork . . . everyone works together and has a voice.

GH: When you bring on institutional funding, such as an investment bank, it really makes businesses level up—and I’m not just talking about ourselves, but our peers in the sector, too.

CS: Do you think that part of the recipe for improving standards in our market is more funding from the likes of JP Morgan and very discerning highlevel lines because it will require more interrogation into lenders’ processes?

GH: I think you’re always going to have two parts to the bridging sector: your institutionally and bank-funded lenders, and the family offices. If I had a pound for

“It wasn’t that we decided to get a senior funding line from the likes of JP Morgan and then put those institutional practices in place; we were attractive to JPM and other funders because we had already done a lot of that legwork” every time a family office or HNWI has called me up and said, ‘We’ve got £100m to lend, but we want 11–12% return on that money—can you do it?’ Our response to that is, ‘Well, no, because if you want to lend at those levels, you’re doing so in a very hard, risky, intense part of the credit cycle that, if a standard bridging lender can’t do it, there’s something seriously wrong with the underlying borrower or the asset.’ Clearly, there’s more interest coming into this space now from institutional funders, but I think what a lot of lenders underestimate is exactly how much money, time, and commitment it takes from everybody within the business.

If you look at the funding process we went through back in March with JPM, you’re talking thousands of hours—meetings that would last 12 hours a day with their senior management. They look into every single part of the business, which is good, because once you’ve got that structure embedded, it gives you the flexibility to grow the group; the trust and relationship are there, and so is your pathway to a half-a-billion-pound loan book.

Gabriella Rees: From day one, we had very high ambitions to get the funding we wanted, and we put institutional practices in place and were very professional. Guy and Nick hired people fairly early on, in a move that was quite ballsy, considering how small we were. It wasn’t that we decided to get a senior funding line from the likes of JP Morgan and then put those practices in place; we were attractive to JPM and other funders because we had already done a lot of that legwork.

GH: In our space, it’s very much assumed that you can set up a bridging lender on the cheap: you can just get some money, lend it out the door, and that’s it. Over the last two-and-a-half years, we have invested a huge amount of working capital in our platform, the team, and marketing—getting everything as best as we possibly can. It’s not something that can be set up overnight, but that’s the beauty of the journey, I suppose.

DJ: Going back to your question about institutional funders possibly levelling up the industry—I don’t think it’s about the funding. I think it’s more about the business, as an organisation, wanting to have that quality or infrastructure. No matter how many institutional funders knock at your door, if you don’t actually want it, it won’t happen. You wouldn’t go through the process, because you know internally that you’re not ready for that type of structure.

NH: When discussions started with JPM, their instant reaction was, ‘They’re too small.’ These guys are used to doing billionpound transactions. When they met us and we had our first due diligence day and chat, they just bought into what we were doing and loved the way we were building the business. And that’s exactly why we’re in such an upward trend now, and why we’re able to just focus on lending and really book build. I feel like we’ve had two to three years of real, solid groundwork without actually reaching our lending capacity— and now we’re at the stage to do that.

CS: Although conversations with JPM were in progress long before Covid, you completed in March. So, at that point, the pandemic was beginning to be known. What kind of support was part of the arrangement that accounted for the fact that you obviously weren’t going to have the year that both parties had hoped for in 2020?

GH: We closed in early March and, then, we didn’t really know what was happening, did we? We didn’t know how bad it was going to be. The cases and deaths were creeping up, and I think a lot of people thought it was just the media trying to create a bit of a storm. But that conversation didn’t come into it until I rang one of the main guys at JPM, two days before we signed, and asked, ‘Will this affect the deal? What do you see happening in the next six, seven months?’

And they were very bullish and said, ‘Listen, we’re still doing the deal; we’re just going to monitor things a little bit

37 Nov/Dec 2020

Glenhawk

more closely,’ and, throughout the period of the lockdown, they were extremely supportive. Like most lenders, we had a few people requesting forbearance—but not at all at the levels that I thought it was going to be. My worst nightmare was that the whole book was going to go into default; none of the exits were going to happen; we weren’t going to get any new loans in; and the shit was really going to hit the fan. And the shit didn’t get anywhere near the fan. In our sector, senior funders see that we’re lending to professional investors, not to people where it’s their sole residence, unless it’s regulated. In summary, the threat was known, the support was there, but, as a group and with the funders and our equity providers, we all worked well to get through it.

CS: The new funding that you have recently secured from Balbec Capital, is it allocated for one part of your lending? Or is it just another line into the main business?

from them to do the equity portion of that. It’s a mezzanine transaction, but it feels a bit like an equity transaction to help accelerate the growth of the group.

GH: It’s not senior debt funding. I suppose you could call it a mezzanine line into the group. It’s from an American credit fund and it’s their first foray into the European real estate market in this space.

It allows us to leverage the business and to introduce new products. In the last two months, we’ve really started to ramp up our volumes again, and this mezzanine line helps us do that. It helps the business where it currently is, but it also gives us flexibility to launch into new areas. So, hypothetically, if we wanted to become a bank, there’s support there

CS: Glenhawk is slowly but surely becoming a pioneer for US investment, isn’t it? Ella, what has it been like to market a lender during this period and what sort of messaging have you put out there?

What have you found is most successful?

38 Bridging & Commercial

GR: When we joined the market, it was incredibly competitive. I felt really strongly that we should make an impact in a big, but quite a focused, way. Now, after transitioning from a small start-up to a serious medium-sized company, and having these senior funding lines to whom

Glenhawk

we must answer, we’ve progressed with more of a grown-up narrative. We have the bread and butter of the trade side of things—the brokers, which we have to market to—but the direct and investor sides as well. The biggest lesson I’ve learnt is to maintain consistent messaging—it’s so important and I am committed to doing that. This year, a big thing is being humble. Funnily, in our market, where it has been so competitive until now, I think it’s been quite nice to see this side of it; it feels like everyone’s in it together.

With the marketing, I’d say that we’ve been sensible. We haven’t thought, ‘Right, other lenders are struggling, we’re going to go really heavy on the marketing and get it in.’ Now that we’ve got larger, I’ve been really pushing bridging finance to a

more mainstream audience and educating the wider property and finance markets about it, leveraging Guy’s experience as a developer and our JPM line. We’ve had our highest level of enquiries in the months since July, and that’s without us aggressively marketing commercially. This period has given us an opportunity to pause a bit and think about how we want to position ourselves. We are so committed to the messaging we’re saying, but how do we do that in a better, stronger way?

CS: On the topic of internal versus external marketing, Nick touched on morale boosting and making sure that everybody’s motivated within this period.

But a lot has changed culturally, socially; there are things that people are finding

different and challenging in the workplace.

How have you instilled the values of the business internally as well as externally?

GH: It has obviously been one of the most bonkers periods of time we’ve lived through since probably the last world war.

In any business, times like this are going to affect people’s mental health, lockdown’s going to be hard... Even for me it was difficult, and I see myself as pretty resilient.

But, emotionally, that was tough for a lot of people, and when we opened the office back up around May, people started to filter back in, and it slowly started to build up until we had about 20 out of 30 people in here.We found that a lot wanted to come back but, due to social distancing, it’s hard to have an office environment

39 Nov/Dec 2020

Glenhawk

where everybody is in—physically, you can’t do it. But we’ve given our people as much support as we can, whether it’s setting them up at home in a comfortable working environment, with a new desk, chair, or laptop stand, whatever they want.

We’ve encouraged people to try to use the office as a bit of a safe haven and a break from what they may be experiencing at home. It’s important to get people to talk about mental health and any issues they’ve been facing and, so far, I think the way we’ve supported people has been good. I held my one-to-ones last week, where I sit down with everyone in the company for 20 minutes and ask them how I can make their life better and comfier, and what they would do if they were me for a week.

CS: Was there a specific trend that came out of those meetings?

GH: A common comment was that they’ve been happy with the support during lockdown and the fact that we didn’t furlough anyone. We could’ve done it and saved money, but I think that gets totally thrown out when you think of the value in not furloughing, and the psychological benefit. The employees don’t have a worry about whether they’re going to lose their job and that, for me, totally outweighed the cost to the business. For me, culture is so important.

Your workplace needs to be better than your home life; it’s got to be comfier, with nicer people. It’s about providing employees that environment where they can thrive and feel relaxed, as well as giving them a professionally rewarding life.

GR: We were a start-up a couple of years ago and, for anyone who joined the firm then, by definition, they were aligned with the business’s ambitions and what we wanted to achieve. It is said that going from a small business to a medium one is harder than going from medium to big, because we needed to put all of the infrastructure and processes in place. And then to combine that with the fact that people are working remotely . . . the core element of our business is the people.

They’re brand ambassadors, every single one of them, representing what we want our clients and investors to think of us.

Damani and I have worked really closely on formalising how we make sure that anyone who joins the team is in tune with those core values, and we’ve had to formulate that into internal literature and introduce more structure into meetings and so on, just to make sure that it is carried through.

CS: Damani, can we chat about compliance shifts and challenges over the past year?

DJ: Glenhawk has always had a compliance mindset. And what we found is that even with the changes to regulatory requirements, because we started that way, we didn’t have many changes to make when it came to understanding them. So, for example, when we were going through the FCA requirements for authorisation, because we had the processes in place already, it wasn’t a change to what we were doing—it was obtaining approval to do it in a setting where we can actually make a difference. As far as the wider industry goes, there’s this ongoing debate around whether or not regulation is required.

I’m of the opinion that it isn’t actually necessary for everything. I do believe that there needs to be some sort of standard that we’re all working towards. How we go about that, I’m not sure yet. Check back with me in 12 months. [laughter] CS: I am going to have to press you: is there something that we could implement to level up or raise standards?

DJ: The short answer is no, not at this stage, because not everyone is at the same point in their journey and, because of that, I think it’s difficult to say, ‘This is what we’re going to do.’ However, from a standards point of view, we can improve these if the whole industry looks at lending as what it’s supposed to be, and not just about profits. Of course we need to make money, but what if we take a step back and look at what lending really is—an opportunity for someone to achieve their dream or goal, and we’re facilitating that. If we just look at it from that angle . . . then I guarantee we’ll see a shift.

GH: And you can run a commercially successful business in this space without shafting the client. There are some lenders out there that, if you go one day over your term or you slip slightly, you’re hit with a 3–4% fee, which, ethically and morally, is corrupt. You don’t have to do that. We never want to put anybody in that position and we’ll try to help them exit. To see some coming to us saying, ‘I need to exit by this date because I’m going to get hit with this fee,’ you think, ‘Wow.’ We try and to help, of course, but I don’t think you can really regulate that; it’s more to do with moral standards. And that’s the downside of operating in an unregulated space.

NH: There are two sides to this: you’ve got the moral side in terms of how people should be treated, but also,

internally, you’ve got quality assurance.

That’s what we have. A lot of lenders outsource their compliance and treasury— everything other than underwriters and business development. We have it all in house, and that allows us to add additional detail to the process. All of that is done in a very methodical way and you can only do that if you invest in the infrastructure of your company.

GH: To give an example of that, I had a call yesterday from a guy with £100m to lend and he said, ‘We don’t care about the borrower, we don’t care about anything, we just care about the asset. All we want is to own the asset at the end of the day.’ And that’s the huge problem with this sector— that ‘loan to own’ mentality is still there.

CS: That is worrying... What changes have you seen in your distribution, and what is the plan for this moving forward?

NH: Initially, a lot of leads came through my connections or Guy’s and, because we were trying to do things organically, we weren’t really pushing. We were focusing more on the infrastructure of the business than the growth of the loan book at the time. Now, coming out of Covid and knowing we’ve got the capacity to spread our wings and lend via the JPM money and the new Balbec funding, Guy and I agreed that this is the time for us to invest in business development. In total, we’ve got five BDMs who have come in, three very recently, plus a junior BDM. That is going to change our origination because, not only have we got the business that comes in from myself, Guy, the brand, and the general traction that we’ve created since we launched in 2018, but these BDMs have backgrounds with challenger banks or with some of our competitors. Before, we were very much focused on the South East and London, whereas now we have coverage on the south coast, in the South West, between Birmingham and Manchester, and from Manchester up to and including Scotland.

CS: Do you see those roles being classic, on-the-road BDMs, or are they going to be a bit more internal?

GH: Covid has changed all that; they can’t really get in their cars any more and go to the pub and build the relationships that way. They’ve had to adapt very quickly over the last seven months. Last week, we had the BDMs in the office here—and they’re all on their phones, doing the deals, talking to Nick, assessing what’s happening... It’s very much a relationship piece now as opposed to a physical one,

Glenhawk

and I think that might have changed the industry for good. Why do you need to go and travel to so-and-so to see if they want a deal when you can just pick up the phone and have a video chat or conversation with them? We’ve definitely not seen a drop in efficiency or in the number of deals we get through, especially since the launch of the regulated product. We’re almost swamped with the amount of deals we’ve got coming in. It just shows that the BDMs don’t need to go out and meet face-to-face, which is an interesting shift.

CS: What’s the split like at the moment on direct versus packageror broker-led business?

NH: We’re still probably 70-80% brokerdriven. We work with a couple of packagers but, again, it’s a volume thing. So, we try to zone in on a top 20 broker list. Each one of my five BDMs has a top 20 or so, and there’s plenty of business to be had from that alone. We’re not the type of lender that will ever churn out business. I look at every single deal that comes through the door—they have to stand up on their own merit, and our BDMs know what questions I’m going to ask and the level of deal quality that I need. I probably only see up to 30% of what they get, purely because they know we wouldn’t fund the rest.

GR: With origination, a really important thing for us is that it’s one thing getting the enquiries in, but those being of quality is another. There are many occasions when we can pump money into marketing and get loads of enquiries in, but it’s an inefficient use of our time, and also for the client where there is often an urgency for shortterm finance. We were quite committed to that from day one, and we still are.

DJ: To back that up, because we have focused on quality from the start, the brokers that we work with now understand. So, there are certain deals that they won’t bring to us because they know it’s not something that we will look at.

Which is quite refreshing for me, especially as someone in compliance, because we have this reputation of quality. Speed is something that we’re quite keen on and we want to be effective and efficient in the way we operate. If a client needs a deal closed in 10 days, we are geared to do it and we can do it, even with the additional processes in place. However, we are not going to compromise that with lending that we’re not morally aligned with.

GR: I agree.

“Of course we need to make money, but what if we take a step back and look at what lending really is—an opportunity for someone to achieve their dream or goal, and we’re facilitating that. If we just look at it from that angle, I guarantee we’ll see a shift in standards” CS: Let’s talk about 2021: what’s on the cards?

GH: As you know, we launched regulated bridging. That’s going very well. It’s a product we like and want to expand and accelerate its growth in 2021. We feel there’s not a huge amount of competition in that space and, considering where we are pricing our product and the service we can give, we believe that we can build quite a good market share there. And then we’ve got the Scottish lending launch. As Nick touched on, we’ve taken on another BDM, Paula Dowson, who was at Together for three years as its head of Scotland and the North. We like the central belt from Edinburgh to Glasgow. There are some nice opportunities up there and some good relationships I’m sure we can build.

We’re moving the head office in London to Regent Street with a nice space that can fit up to 50 people, which will allow us to grow further. I’m taking a bit of a bet that we’ll all be able to come back into the office soon. And then, really, it’s about launching our future offerings.

We have a head of product development starting in January, from one of the most well-known banks in the UK—she is very much the lynchpin for our expansion into other areas. There’s a common theme here—all of our latest starters are female. What is it now, Ella? 18 women?

GR: Yes, and 14 men.

GH: We’ve also got a head of lending starting in a few weeks’ time; she’s coming over from LendInvest. Our new head of product development will be strategising with all departments in order to expand the group across the specialist real estate lending sector. So, it could be, let’s say, second charges, or a five-year commercial term product. It might be a prime bridging product. We’ve got a lot in the pipeline that we want to launch. Ultimately, it will culminate in us entering BTL. It’s a space that I like and only want to go into it if

we can do something truly innovative.

It’s a crowded area, margins are tight, and I only want to do it if we can make headway. The theme for next year is to launch innovative new products that we put our own little Glenhawk twist on.

CS: You guys aren’t pulling back at all. I love it.

GH: I think, in times like this, yes, there is uncertainty out there, but the reality is, we all need to get on with our lives. It makes sense that we continue to push.

DJ: My word for next year is ‘growth’.

We know we have what it takes to build a business and, because we’re all aligned with this vision, it makes it so easy for us to just go out and get it done. Slowing down during Covid means that we have to strap a turbo onto our back next year.

Regardless of whatever else is going on around us, we need to go for it. If something else happens and we have to slow down again, we’re ahead of the curve because we have decided to go forward.

GR: This year has given us the time to regroup ourselves a bit, which I think has been a real positive—an opportunity that we wouldn’t otherwise have had. We’ve really taken advantage of that and, in terms of the products we’ve thought about, we’re not going to launch anything just for the sake of it. It’s really given us the time to look at where the gaps are and what we can do. Also, this year has taught us that this space is perhaps more resilient than we thought—it’s an attractive sector. The fact that we’ve got this mezzanine funding during this time has been a massive boost for us. It’s just a very exciting time for us now. We are one of the fortunate ones—we can go into next year really confidently.

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And maybe, like you, having to do things a little differently – for the time being, at least.

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Together

Everything you want to know about Together 2.0 In March,Together—one of the largest nonbank lenders in the UK, with a staggering £4.2bn loan book—made headlines after temporarily halting new loan applications across its product range in response to the Covid-19 crisis.The 46-year-old business, which has now been through an eye-watering four recessions, has since re-entered the specialist lending market, albeit cautiously Words by

BETH FISHER

44 Bridging & Commercial

L-R: Pete Ball and Marc Goldberg

Together

“In some ways, we’ve never really liked the term specialist lender”

46 Bridging & Commercial

T

ogether’s growth trajectory over the past five years fruited an over £200m-a-month lending business, pre-Covid. The concern that this mammoth force in the specialist lending market may not return to its former footing is a natural one for brokers. To get a better understanding of the lender’s nearfuture outlook and appetite, I quizzed its commercial and personal finance CEOs, Marc Goldberg and Pete Ball, to find out what ‘Together 2.0’ will look like.

Why did Together take the decisions made in March?

The day after Boris Johnson announced the lockdown on 23rd March, Together managed to get 730 people working from home, which was no simple task. While the lender was still continuing to fund transactions with binding offers, after listening to government plans for mortgage payment holidays and the furlough scheme, Together realised it needed to revert back to the basics. Its number one priority was (and remains) its thousands of existing customers—people who don’t know what is going to happen with furlough, their jobs, or payment holidays—and its potential ones.

“One of the questions I think a lot of people [have] is why we took the decision we did on the pipeline business,” Marc states. “Six, seven execs [were] sat around the table, with a group of highly experienced non-execs, saying, ‘This is such an unpredictable market. We needed to protect our customers and then speak with our funders after analysing the market, and find out if we’re going to get any redemptions or payments. We think we should pause lending,’” he explains.

Together—which, at the time, had hundreds of millions of pounds worth of business in its pipeline across commercial and personal finance—then started working with a dramatically reduced cap of £20m a month to lend. “That’s a big decision to make, and it’s never happened in my history, ever,” Marc says.

“All our salespeople were saying, ‘Brokers want to know what we’re going to be doing with the rest of the pipeline,’” he discloses.

“We would have loved to have said, ‘Look, we want to put everything on hold for three months, and we’ll assess the situation.’ But we weren’t in a position to do that, because we didn’t have a crystal ball and couldn’t say everything will be rosy in three months.”

Together

Will Together have a more focused offering in the future, or will it get back to the product set it previously had?

Pre-Covid, Together had close to 300 product variants as part of its commercial and personal finance businesses. These mainly derived from the last recession, when it had to put numerous different property types and LTV bandings, among other considerations, into its criteria.

Marc admits that due to layers upon layers of complex transactions which had built up over the years, from moving to a heavy adverse to a near-prime lender, the product set had become complex.

While Together plans to retain a diverse range of products, and is set to launch new ones in December and January, its “reset” or “cleanse”—as Pete describes it—means that its offering has been completely stripped back. The personal finance division, for example, now has just 10 products, which it will gradually increase. Pete explains that this is important, not just internally in terms of having more straightforward systems and processes, but it will also be simpler for its brokers and customers to understand.

For bridging, the offering will mainly be in the unregulated, residential space, such as for BTL purchases at auctions, in addition to some regulated and commercial bridging. “Bridging is the market we know and understand,” Marc notes.

Pete divulges that, around 18 months ago, Together started using the term ‘the new norm’ based on how it was seeing the market evolving around people being self-employed, working zero-hours contracts, and the changes among portfolio landlords. “In fact, in some ways, we’ve never really liked the term specialist lender,” Pete admits. “‘New norm’ was something that resonated and it really worked, and now you hear it all over the place, albeit in a slightly different context.”

He points out that people’s circumstances and ways of living have changed even more rapidly this year, and thinks that Together’s 46 years of knowledge and experience of adapting to changing requirements is a great reason for the business to be optimistic. “And if there are more [lenders] out there who understand people’s new circumstances, it’s better for customers as well.”

However, what brokers are likely to see is that Together will be concentrating on service first and products second. “If we’re trying to be all things to all people, it can sometimes take time to process,” Marc says.

He emphasises that the lender’s approach is not about volume. “It’s about being the best in the product ranges that we offer.”

Since re-entering the lending market, Together has been working with limited distribution.

When will it be available to the wider broker market?

Pete tells me that there isn’t a prescriptive plan, but that distribution will be managed on a weekly basis, all the while maintaining levels of service. “We need to touch base again with our partners who we’ve known for years,” he says.

“What have they gone through? What do they want? What do they want to see?

And then, gradually, build that up.”

Getting its underwriters to think in a different way and test its new systems and processes will take some time, and Together aims to release these new products when they are tested and ready for the market.

“Everything we’re doing at the moment is considered,” Marc adds. “Now, it is not about growth in lending—it’s about quality and getting quality submissions.

When we have a greater lending appetite, we’ll expand our distribution channels.”

In other words, we should wait and see.

Is it in Together’s plans to return to pre-Covid levels of lending in the future?

“Definitely,” Marc responds—although he doesn’t see it happening in the near future.

“We can’t put a time on it,” Pete adds.

“We are nervous about Q1 and Q2 next year,” admits Marc. “Nobody can predict what’s happening with house prices or what’s going to happen in the commercial market.” The duo confirm that Together is currently lending approximately £50m per month across commercial and personal finance, still a way off from what it was delivering pre-Covid.

Pete explains that it wants to provide a “gold standard” of service, but did not want to set that perception and then attract too much business.

This is the thinking behind its gradual, prudent return. “We [are expected] to get back and beyond where we were,” Pete says. “We have a single shareholder with high expectations of all of us, so that’s where we’ll get to.” However, the lender won’t be able to put a date or time on it.

Marc predicts that, in the next three to nine months, there will be many opportunities in a depressed market.

“There are people sitting on a lot of money who will come to the market and see property as the best place to put it,” he believes. “That will mean moving extremely quickly, and dealing with a lender that understands what they’re doing.”

However, he is conscious that we are

47 Nov/Dec 2020

Together

currently in a bubble, and has his eye on unemployment levels. “We are very wary of what 2021 may bring,” he admits.

As Marc points out the metaphoric scars he has from previous recessions, he explains that the current environment is completely different—no one can say that they have lived through this before. But having been through these painful scenarios is still important. “When you’ve got the knowledge and experience we have, now is not the time to put your head above the parapet and say, ‘We’re doing 80% LTV’ or, ‘We’re chasing volume,’ it’s about protecting the back book,” he states.

“We’ve got good funding lines. We are profitable. We will be able to ride out what next year’s going to bring,” he says, positively, adding: “Our primary focus is customers, customer outcomes, and protecting that back book.”

How has its significant investment in tech really changed the way Together operates?

A key objective for the lender has been its technological transformation. The number of changes that Pete and Marc tell me about is vast, and I have no doubt that they will be felt by brokers going forward.

During the down time, Together was able to utilise its staff who were no longer doing their day-to-day work to test new tech processes, and so accelerate progress.

As a result, a lot of the tech projects it had planned over the next two to three years are already being concluded. The lender has a new head of innovation, Matt Mawdesley, and a working group focused solely on transformation, automation and innovation—something that Marc believes has got them through the past six months, by giving them a glimpse of what the new world will look like.

Marc explains that trying to test and launch new systems while underwriting hundreds of transactions was “nigh on impossible” before. Being able to invest the time this year in technology, such as e-file, means it is now completely paperless. Together is also using low-code programming (a software development approach that requires little to no coding to build processes), which enables it to control much more internally.

“This technology journey that we’ve been on has probably moved us forward 24 months in the space of six,” Marc points out.

With a smaller workforce, has Together’s capability changed?

Back in July, Together announced a consultation process on proposals to reduce the number of people employed.

Some 175 jobs were cut. I ask whether its ability to increase lending volumes later on will be aided by the enhanced tech.

To avoid manual validations, the lender has been using Open Banking, robotics and AI to gather customer information at the start of a loan application. This means that Together will be automating 80% of its personal finance, BTL and straightforward bridging cases, which will allow more time to focus on the remaining 20% which it calls the “exceptions”— those that require looking at the “whole circumstance” of a particular application.

“We’ve always prided ourselves on manual underwriting: real people making decisions,” says Marc. However, he points out that one thing to consider is the cost of acquisition and having to process these applications. “Where it needs a real person looking at the transactions, speaking to the customer, finding out more information— we’ll keep our USP as being the common sense lender,” he adds. “But you don’t want to have a thousand people sitting in an office going through files and manually underwriting, because that’s not sustainable.”

Together will also be using Open Banking to proactively work with new and existing customers. “We’re able to say to customers, ‘We feel you may be under some stress right now. Feel free to talk to us. We can help you.’ And we see a fantastic response from that,” highlights Pete.

How will Together further strengthen its funding lines, and has its funding model changed?

Over the past 10 years, the lender’s funding model has evolved into different asset classes. While Together has a “considerable amount” of its own money in the business, the structure of its funding lines is complex: we’re talking investors, bonds and securitisations. While funding diversity has been a buzzword in recent years, especially since the EU referendum, it’s not without its challenges.

Pete explains that, in the short term, every institution has been looking at covenants and the threats and issues around them.

Together had to renegotiate with its banks to get them to agree the facilities and provide all the information required, while also navigating payment holidays with around 7,500 of its customers across the group.

“In a Covid world, to have the different funding structures that we’ve had, I think, has probably added many layers of complexity,” Marc admits. “And, as Pete said, everyone’s got different questions, and datasets and information that they want.

So when the government came out and said, ‘We’re going to give a three-month 48

Bridging & Commercial

payment holiday to all the homeowners that have been affected by Covid,’ that prompted an immediate call for action.”

Having to navigate a “huge” pipeline of business at the same time was no easy task. So how did Together survive other recessions? If you look at the last one in 2008, the business consisted of only around 150 people, with a loan book below £1bn— and just two or three banks to consult with.

Interestingly, the pandemic has pushed Together to think about what the future of its funding will look like and it is continually reviewing its options for growth. “When you’ve got a business that’s been successful as long as we have, with the data and prudent LTVs we’ve got, we think we’re an exciting proposition for anyone to invest in,” Marc declares.

Behind the scenes, Together managed to raise a hefty £531m during Covid to look after its back book and support new business in the future. While it has been cautiously optimistic on the general performance of its loans so far, it is watchful of other moving parts beyond its control, such as furlough, payment holidays and CBILS. “Forbearance is critical to look after those customers who need more time,” Marc says. “And our view is that, for customers who want to be helped, we want to be in a position to do that.”

What is your honest outlook of the specialist lending market?

Marc thinks that, over the past nine months, many people in the market will have questioned how their respective companies do business, why, and the cost of doing so.

“One of the big things that we’ve been focused on over the last two years is the cost attached to our ability to transact,” he says. “I recently mentioned to somebody, ‘I’ve never heard the office as quiet…’ and one of our underwriters said to me, ‘This is the new way of us working.

We’re not running around anymore.’”

Efficiency seems to have been the biggest lesson of 2020. “I’ve spoken to a few brokers who have said they’ve never been busier,” Marc adds. “Some of them are saying they’ve never been more profitable, because they’ve cut down on some of their costs. They’re focusing more on quality and conversion. Everybody’s working differently.” He believes it’s a great opportunity for Together to rethink what a modern business should look like.

“We see the specialist lending market as something that we know and understand,” Marc tells me. “And if we can modernise our business and transform the way we do things . . . the opportunities for lenders like ourselves are really positive.”

Together

“When you’ve got a business that’s been successful as long as we have, with the data and prudent LTVs we’ve got, we think we’re an exciting proposition for anyone to invest in”

49 Nov/Dec 2020

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Monument

Monument

Words by

BETH FISHER Illustration by

Sam Needham

Monument

In the words of DJ Khaled, the UK challenger bank market has provided us with yet “another one”. I can hear the groans already—have the cohort of glossy entrants over the past five years or so not already covered all the bases? Monument—which was granted a restricted banking licence from the PRA and FCA in October— doesn’t think so. In fact, it believes a substantial group of well-heeled professionals have been missing out on the bank-switching revolution Taking its name from The (actual) Monument—a globally recognised commemoration of the Great Fire of London, which celebrates the rebuilding of the City and was designed to serve as a giant telescope to enable a level of vision that didn’t previously exist—this new lender seeks to represent the end of the old era, and a transition to modernity. The concept is a little haughty, even for the moneyed, but it grows on me.

Having achieved, in just over 18 months, the first of two stages through which the regulators give a bank a licence to operate, the digital-first business is now in the process of completing its series A funding round, without relying on government schemes or public money.

Shortly after its existence hit the headlines, I ask Monument’s chief operating officer and chief commercial officer, Steve Britain and John Saunders, to talk me through why now is the perfect time to build and test a new challenger, what novel ideas the bank will be bringing to the already competitive bridging and BTL markets, and why it has decided to purely focus on the mass affluent—when others haven’t.

Steve created HSBC Premier in the UK over 20 years ago, and therefore understands what institutions have sought to create for the wealthy in the past. However, he claims that propositions from the big banks for this customer base have eroded over time, with service diminishing due to a bigger focus towards the mass market.

When Monument’s CEO, Mintoo Bhandari, approached Steve, they discussed how an offering for the well-off was ripe for transformation. “I could see that a digitalfirst, mass affluent offering would be very distinctive from what’s out there already,” Steve says.

John—who comes from a private banking background, having worked at UBS Wealth Management, Barclays Wealth, and Deutsche Bank—heard about the opportunity through one of the co-founders with whom he worked at Barclays and, for him, it was a “lightbulb” moment. “It was immediately obvious that there was an increasingly orphaned segment of people who would 54 Bridging & Commercial

really welcome people doing stuff for them, that’s designed for them.”

With the incumbent premier and private banks said to be largely focusing on the majority of the market and UHNWs, in addition to numerous challenger bank entrants in recent years which have, in the main, catered to SMEs and the deep funding cracks that exist there, the people behind Monument believe that the wealthy community of busy professionals, property investors, entrepreneurs, doctors, lawyers and accountants—who have a net worth of between £250,000 and £5m, excluding their main residence—have not been identified as underserved. “They’re not getting the level of interaction and service [that they need], and they’re not getting banks who are prepared to treat them as individuals,” Steve claims.

I find it fascinating that there are apparently no banks that are solely serving these clients.

Clearly it’s a missed opportunity—and a profitable one.

To better comprehend the size of the gap here, the bank has spoken to almost 2,000 people—including potential customers and investors—about its proposition and claims that 1,999 of them were not satisfied with their premier bank. I’d like to know where the minority of one is banking…

John and Steve seem to think that this discontent is down to how these clients are, or aren’t, considered by banks. With the plethora of tax changes that have been rolled out over the past few years, many property investors have set up and borrowed through limited companies which, following Monument’s own research, John believes has been difficult for some lenders to manage.

“They’re not sure what you are. Are you a private client or are you a corporate? Which part of the organisation should you be in?

And if you are going from one side of the organisation to another, you’re suddenly at the back of another very long queue with no relationship to leverage there at all.”

Monument, however, will be built for this type of borrower. “We know that’s what people are doing now, so the journeys and experience [we provide] will be based around [this], rather than trying to catch up with that reality…”

The pair were attracted to join Monument by the calibre of the team Mintoo had put together. Rather than employing consultants to successfully drive it to the licence stage, it appointed Nihar Mehta as its chief risk officer, who has seen at least 15 different banks go through the entire process.

“We’ve deliberately gone about creating a management team of the right experience and quality to engage with regulators and investors,” Steve states.

This also extends to the board—chaired by

Monument

“We’ve deliberately gone about creating a management team of the right experience and quality to engage with regulators and investors”

Niall Booker, who used to be the CEO of the Co-op Bank—which includes Sir Andrew Likierman, who was knighted for leading a project that changed the basis of government planning, control and reporting from cash to accruals. “These are all people that are known to the regulator,” Steve says. This has definitely helped Monument through the long-winded process of securing the bank badge, which is said to include a 200-plus page regulatory business plan, among capital and liquidity documents and major policies.

Highlighting the strength of the team, Steve estimates that the pandemic probably added only a month or two to the process. “Just over 18 months sounds like a long time,” he says, “but it’s [relatively short] in the context of getting a banking licence.”

In parallel to this, Monument managed to raise £7m upfront, which was then topped up with a further £4m at the beginning of 2020 and, at the time of this interview, it was completing its first venture capital funding round. When I ask why they think

investors have been keen to back the new bank, Steve believes it’s because it is set to be profitable from an early stage. “We are not going to be one of the banks that seeks to grow customer volumes to large numbers, and then turn that into profit down the line.” John tells me that it’s unusual to capital create so soon, as opposed to being capital consuming. “That’s a big difference, and quite an attractive story for investors to get behind.”

Launching a bank amid the current health crisis may not sound ideal, but it has proved to be a good acid test in terms of futureproofing itself. While many institutions have had to deal with extensive back books, payment holidays, and the prospect of zero or even negative interest rates, Monument will be able to start with a blank canvas, and has been thinking about all these moving parts while designing its systems from the ground up.

The technology, which John describes as the business’s “magic dust”, is something he

claims is rarely at the forefront of private banks. Monument has recently signed agreements with a number of key providers to enable it to create the foundations of its bespoke platform. It aims to use technology solutions that are easy to integrate and, if necessary, able to be replaced should the need arise—perfect in an unstable environment. It will also have the means to make frequent enhancements to its service offering and client experience, in response to the developing requirements and feedback from its clients.

The design of its “Lego-like” technology platform—which can connect different components and change them when they no longer work—is Monument’s solution to the challenges encountered by the legacy systems of incumbent banks. “We are developing our own mobile app and digital front-end, but we are integrating the solutions, and therefore we can do that extremely cheaply compared to the cost existing banks face in terms of putting

55 Nov/Dec 2020

Who is helping to create Monument?

Mintoo Bhandari

Co-founder and chief executive officer Experience: 25-plus years in investment, equity, credit origination and execution, including 11 years as senior partner and managing director at Apollo Global Management.

The vision: “Returning to the UK after working abroad for some [time], I experienced how broken premier banking was and saw the fantastic opportunity to reinvent banking services for an increasingly neglected segment of the UK’s population.”

Vikash Gupta

Co-founder and non-executive director Experience: Founder of VAR Capital and seven years at Barclays Wealth.

The vision: “From my background in the industry, I could see that many private banks were simply no longer set up to deal with the needs or expectations of many successful people. That created a real opportunity to build something specifically for this group, and to harness the potential of modern technology to do that.”

Niall Booker

Chairman Experience: 30 years in senior global leadership roles at HSBC, including CEO of North America, and chief executive at The Co-op Bank following the 2013 crisis.

The vision: “As a customer and a banker, I had long wondered why banks didn’t really meet my needs or, worse perhaps, know what my needs were. It was very refreshing and exciting to find in Mintoo and Vikash people who wanted to understand people like me better through the use of data.

Importantly, they also didn’t want to spend large amounts of shareholders’ capital on systems to do this which were out of date the day after they were plugged in.”

Michael Winfield

Head of client services and operations Experience: 20-plus years of financial services experience across banking, investment and wealth management, primarily in senior service and operational roles with firms including HSBC, Henderson Global Investors, Octopus, and Nutmeg Saving and Investment.

The vision: “What really attracted me was Monument’s passion for delivering unrivalled levels of service to their clients.

For too long, the financial services industry has taken its client base for granted and Monument’s approach and understanding that the client has to be at the heart of everything it does will set us apart.”

Conor McDermott

Head of lending Experience: 16 years in end-to-end lending in the UK, most recently with Arbuthnot Latham as director of trading, heading up the specialist team. He has a background in credit underwriting and experience working in challenger banks.

The vision: “I was attracted by the opportunity to create a truly differentiated approach to the needs of brokers and portfolio landlords in particular, without it being a binary choice between a digital or traditional relationship-led [model], but to combine the best of both.”

Sudip Dasgupta

Chief technology officer Experience: More than 20 years, including as a senior director at Publicis Sapient, building technology platforms for start-ups as well as very established tier-one financial institutions in the UK. The vision: “When consulting and delivering technology solutions to large banks, I realised that there were many inefficiencies in the way they were delivering services to their clients.

Monument is looking to build a bank with superior client service at its core, and it [is] the perfect opportunity to put together a class-leading digital banking platform to enable this.”

Nihar Mehta

Chief risk officer Experience: Responsible for assisting with the creation of regulatory authorisation functions and has latterly helped lead PwC’s multidisciplinary bank start-up team. He has advised several challenger bank applicants in navigating the regulatory process, building teams/operations, and raising capital.

The vision: “Having worked with at least 15 other neo/challenger banks as a regulator, consultant or investor, I felt like I had a unique perspective on what good looked like in the banking start-up world.

For me, Monument’s profit-oriented and highly scalable strategy seemed like one of the best business models. The team is incredibly strong, so I felt the execution would be excellent and a great opportunity for me to learn from the best. It was impossible for me to say no.”

Rhea Chatterjee

Head of people Experience: 20 years of people experience largely across financial and professional services, including professional development and recruitment at McKinsey & Company, and talent management at the Bank of England. More recently developing

end-to-end people functions for fast growth technology and banking start-ups.

The vision: “I was drawn to the opportunity to join such an impressive team at an early stage, shaping a people function to build on these strong foundations, and to create a culture and environment that attracts, develops and empowers the next generation of financial and technology leaders.”

Wasim Khouri

Chief strategy officer Experience: Was a senior manager at McKinsey & Company, serving consumer-focused FTSE 100 clients on corporate, digital, AI and business unit strategy, as well as developing customer-centric experiences.

The vision: “Joining and building Monument allows me to combine two of my passions: technology innovation and developing client-first propositions.

At Monument, we will combine modern technology with smart human support to deliver a superior client service that caters to a large, highly valuable, underserved client segment.”

Iestyn Evans

Chief financial officer Experience: 20 years in financial services, including CFO and finance director positions at Target Group, Omni Partners, and Cambridge & Counties Bank.

The vision: “I was seeking a role to help lead an organisation that was positive and looking to genuinely evolve the banking proposition, and which had people in it that I’d be proud to call peers. Add in the mass affluent aspect— which is probably the most underserved segment of the market—coupled with Monument’s great customer experience aspiration, and joining was a no-brainer.”

Julie Brooks

Chief compliance officer Experience: 20 years of banking experience, and at PwC, involving broad compliance and financial crime knowledge at three international banks, including Bank of Ireland and Bank of China. Her most recent roles have been focused on advising and working at firms applying for UK banking licences.

The vision: “The proposition was an interesting one, with real opportunity to offer something that is needed.

In particular, I relished the chance to use my previous experience right from the start of the process.”

Monument

together and developing their systems,” Steve points out.

Its savings proposition will be almost entirely digital, while its lending will use a blend of tech and people—suited to what the client wants and needs. “We will have credit specialists who will be able to get involved in deals, because we’ll be doing larger, more complicated transactions,” John notes. The bank will, however, have the ability to provide purely digital journeys for BTL and property investment lending of up to £2m.

Monument aims to avoid the one-size-fitsall credit policy for its wealthy client base, and instead offer a tailored approach. “We can help the mass affluent clients on their journey because they’re time poor,” says Steve. “They don’t have time to spend ages waiting to meet or talk to someone. They just want to get on with it—and we want to be the facilitator of that.”

As an example, for more vanilla loans, Monument will be able to capture relevant information about the borrower and the property they are looking to acquire or refinance, with an aim to provide a decision in principle within minutes.

John says that Monument wants to put transparency at the forefront of its lending process, so that brokers and their clients know what is happening to their applications. “When it starts getting in the hands of lawyers and valuers and other third parties, it can be really difficult to track where things are and whose court the ball is in. So, we’re looking at a piece of technology that can help us make that transparent to clients as well.” Its tech will also extend to the post-drawdown stage of a loan, where

John thinks the servicing elements are currently “limited”.

The team expects that the build of its technology and operational capabilities will enable its official launch in early 2021. While no one knows what next year will bring, Monument believes its client base will be able to weather potential upcoming storms.

“In terms of the market environment, the mass affluent are a pretty robust group, economically,” Steve points out. “They have reserves, they have resources … they remain forward looking.”

A big advantage of the segment that it’s focusing on is that it will be attracting higher-value deposits (a minimum of £25,000 to open a savings account), and providing higher-value, low-volume loans, meaning that service is less likely to be impacted as it scales.

I am told that this well-off group are particularly fascinated with property as an asset class, which John doesn’t see changing any time soon, especially while interest rates are low. As a result, the two core offerings Monument will be launching with are in the bridging and BTL sectors. Its typical clients won’t be one-off landlords; they will have a property portfolio that they are seeking to build up over time, and be in need of a reliable lender that they can quickly call on.

It also hopes to expand into commercial real estate in its second year, but I am told that regulated lending and ground-up development will not be on the cards.

In terms of its lending ambitions, Steve responds that they expect to build a sizeable book: “Billions, not millions—over time.”

And how will it do this while there are still many banks and non-bank lenders in the

space? Monument hopes to retain customers through loyalty perks—something John believes is lacking in the banking sector— through which it can extend better deals for those that keep their savings, or renew or take out additional loans with Monument.

“Your business is valued, whether you’re a depositor or borrower. And we want to recognise [that],” John says.

“The UK market, despite everything that people say about loyalty, continues to put better offers in front of new customers than it does existing [ones],” Steve notes.

“It annoys people,” John interrupts—and this is said to be particularly rife in the mass affluent market.

Another way that they believe the bank will cement its place is by avoiding the current account market, which John says focuses on volume, rather than value. “We see [it] exactly the other way around.” He acknowledges that there are providers lending to the mass wealthy, and anticipates that they will be able to co-exist quite comfortably.

While the bridging landscape has altered over the course of 2020, they feel that Monument will stand out by assuring brokers—which it expects around 80% of its business to be driven by—that it can execute deals, something that has become a sore point in the market in recent months.

But how will it forge these new relationships? Considering the breadth of experience the existing team holds, they will first be leaning on their own large networks of brokers to prove their worth and meet expectations. “We’ll tell them quickly that we can do a transaction, or if we can’t,” John states. “It will be about the speed and quality of execution.”

Against a backdrop of funding woes and miscommunications around committed backing in the specialist lending market, the pair believe that they have an advantage over non-bank lenders due to being able to garner hefty deposits at affordable yet competitive rates. In addition to existing banks having to deal with legacy systems and back books, John claims that there are non-bank lenders that are struggling for wholesale capacity, or finding it more difficult to securitise, which presents “significant opportunities” for a new bank.

“There are people whose business model is to basically identify bridging loans and then go and source the funding. We’re not going to be in that position at all—we will have the funding in place,” Steve emphasises.

Funding aside, they understand that it’s about identifying whether or not a transaction can be done, and not leaving brokers waiting. “We recognise that’s the ask, and that’s what we’ll design ourselves to deliver to,” John concludes.

57 Nov/Dec 2020

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It’s time to question why, when crosssector shifts towards being on the right side of history are being made all around us, we’re standing relatively silent and still

It’s time

or a year in which we spent large swathes of time locked down, a lot has happened.

At the start of the summer, amid a global crisis, an incredible multinational outpouring of grief, anger and solidarity with the Black Lives Matter movement— in response to several high-profile killings of black people in the US—sprang forth through powerful social action, raising critical awareness of race-related injustices experienced everywhere.

It struck me as odd that, while my personal social feeds were rife with support for the cause, work-related posts and threads remained comparatively disengaged.

LinkedIn was still filled with service-related rants, humble brags, and people refusing to name names, leading me to ponder: why are we so reticent, in a professional context, to express our views in relation to race? Politics, an equally non-dinner-table-worthy topic (if you subscribe to such mores), features regularly.

So why is no one talking?

It can’t possibly go unnoticed how overwhelmingly white our sector is—or, is that in itself a clue as to where the answer lies? Who exactly is supposed to start the conversation or drive the change? Right from the beginning, we pledged to use this magazine as a platform for outstanding editorial content, and not to shy away from the trickier topics.We have long aspired to prise and keep open the lid of where our industry stands in the fight for equality, in every sense. As much as we love hearing and writing about your record completions and recruitment sprees, if this year has taught us anything, it’s that we are all part of a community—and that progress can be accelerated by the most unlikely of events. I believe that we can do better.

Rather than express in detail my views on the matter, I have chosen to relay the thoughts and experiences of people in our industry, in their words. I am extremely grateful to these contributors for making this feature happen, and am humbled by the opportunity I have in delivering their message. You were trepidatious and you did it anyway.

This is intended to ignite a vital discussion about the underrepresentation of people from black and minority ethnic backgrounds in our parts of the market. Readers, it is your mission to continue to give and make space for this important issue.

Caron Schreuder

62 Bridging & Commercial

It’s time

Curtis Goring

Managing director at The Aftersales Network Firstly, I’d like to say that I have and continue to truly enjoy my career in the financial services industry, which spans over 40 years. There is so much talent and a spirit of friendship and community in our sector.

When I was asked for my views on this matter, I must confess that there was an element of fear in contributing my experience, fear that the message may be misinterpreted. But I have faced many challenges in regard to discrimination.

Some of it direct and harsh, some of it in the guise of nationalism, some of it subtle and systematic. However, I do feel that it is important for everyone to be a part of the solution and not just a bystander.

While I acknowledge that there have been massive improvements in diversity and representation during this time, the pace of change has been very slow. In a lot of ways, technology and social media have created a platform, a spotlight, and a voice to champion the need for change; there is now full visibility on the challenges the BAME community faces every day.

This year, in particular, has been huge for awareness, led by the power of social media and magnified by the death of George Floyd and the political divide in the US, and, some would argue, the division caused by Brexit.

As a consequence, there are many examples of our sector championing equality— the high street banks, in particular, have been at the forefront of positive change, but there is a long way to go.

It is difficult to pin down one reason for the underrepresentation in our market, however, the solution starts with education and equal opportunities for all. There are now role models and mentors in every industry, including financial services, that our young talent pool can unconsciously identify with and draw inspiration from.

How did my experience and career journey differ from my peers who are not part of an

underrepresented group? As with many in my community, I too had ‘the talk’ (which, sadly, I’ve had to have with my children, too): “You have to be 10 times better.” “You have to work 10 times harder.” “You fit the description,” when stopped by the police on many occasions. There have been innocent comments, such as: “I did not know he was black,” begging the question: “What would happen if you did know I was black?”

Thankfully, it was always in my nature to work hard and persevere. I have had a relatively successful career, but I have observed at leadership meetings and conferences over the years that there was an underrepresentation of BAME people working in the sector. I can also say that this has now significantly changed for the better but, again, there is still a lot of work to do.

I feel that, in order to prevent systematic underrepresentation, ethnicity pay gaps, and improve opportunities for BAME employees, organisations should publicise their figures. That way, they can justify their actions if called upon or, indeed, challenged.

63 Nov/Dec 2020

It’s time

Mike Hue

Founder of Embassy Financial Services I have been in the specialist finance industry since 1980, and my experience with regard to diversity and representation has been quite positive. In fact, when I worked for secured loan lender Cedar Holdings Ltd, I have to comment that this was the most diverse company I have ever been employed by—and that was in the early 80s. I was surprised when I joined to find at least a third of the company were from an ethnic minority background, in management, clerical, and underwriting positions. This was in stark contrast to the lender I first worked for, where I seemed to be the only ethnic minority employed by that company. Having said that, I did not knowingly encounter any prejudice from my peers or management.

Obviously, having been an employer since 1987, I have always hired people on ability and not their ethnicity. From my observation of the specialist finance industry, I have noticed a lot more BAME people working in the sector, compared to when I started out. So, in my opinion, things are moving fairly swiftly in the right direction. Recent media attention on this matter has likely made employers in all industries sit up and take notice, and look within their companies at the question of diversity—which can only be a good thing for BAME employees.

I do not feel that my career has had many unique challenges in comparison to my peers who are not part of an underrepresented group; however, I cannot comment on behalf of others. It is always positive for up-and-coming young people to see those who they identify with in leadership roles, because role models encourage them in thinking that they too can do the same to achieve their dreams and goals.

My conclusion is that the UK is making strides, but there is always room for improvement.

The drive to remedy the problem of underrepresentation of BAME people in the UK in 2020 is definitely being highlighted, with many major companies using advertising campaigns to address it. I think the future looks bright.

64 Bridging & Commercial

It’s time

Marcus Dussard

Sales director at Hampshire Trust Bank No one should look at diversity and representation as a tick-box activity; it is more beneficial to implement long-term commitments and practices and to think about how we can move forward without it being a trend or a thing that we have to set out to do. To be compelled to act causes impulsive short-term ideas and plans. True belief in diversity means that any action should be designed for longstanding change.

Back in May, there were lots of businesses that were releasing statements on diversity, representation, and inclusion, and very much placing this at the forefront of their social presence. The question is, what is the message now? I think that as long as we have a willingness to move beyond words to action, we will make improvements in the specialist finance market.

The events of this year have clearly been an inflection point for societal selfawareness and contemplation. Whether that has filtered through to the industry as a whole is difficult to know, as our own individual lived experiences will determine this, and if those cause people to think about how they are using what they have to benefit others and create workplaces that better reflect our society.

I have no doubt that most people, and therefore most in the professional world, are not racist and do not agree with overt racism (the dehumanisation of another human based on the colour of their skin).

However, being actively anti-racist needs to become the new norm. To me, that means recognising that racism is more than just offensive comments—it’s in the fabric of our institutions, healthcare, housing, policing, criminal justice system, and education. To be anti-racist is to take personal responsibility in educating yourself on the very complex subject matter and doing something to tackle it.

Underrepresentation is not new a topic.

There are plenty of opinions on the subject, most of which heavily support the idea that having a diverse workforce/ leadership increases performance, productivity, and the overall profitability of an organisation. To have a truly diverse company is to have variety of minds, ideas, and approaches—all of which allow companies to serve the society we live in.

Research from McKinsey & Company highlights that workplaces with a healthy mix of ethnicities are 36% more likely to outperform. The Parker Review, commissioned by the government in 2017, made a series of recommendations and set a target for all FTSE 100 boards to have

at least one director of colour by 2021.

An update from February this year states that progress has been slow. It has called on companies to engage constructively on ethnic minority diversity issues, report more transparently, develop a diverse talent pipeline, and recruit proactively.

The output of the report is indicative of some of the work that needs to be done in the specialist sector; it’s the responsibility of business leaders to understand why there may be a lack of representation.

There is a vast range of initiatives out there that can work towards alleviating bias in the workplace, but they only work when they are tailored to the companies that implement them. As a general trend, businesses that are inclined to succeed are those that recruit with the help of dedicated diversity and inclusion firms; these companies have the depth of experience to get it right. I recently spoke to Frank Starling, founder and CEO of one such outfit called Variety Pack. I was blown away by how complex the topic is, and it highlighted to me how important it is for companies to refer to a specialist.

I’ve always ensured that I evaluate myself by assessing what I bring to the table in a professional environment. Conscious that I’m underrepresented, particularly at my level as sales director, this can often put pressure on people to overcompensate. I’m also consciously aware of how society in the main sees black people, so I know I need to bring the best version of myself to work every day and that my actions may well shape the thoughts of those who may not come across black people in their everyday lives. I feel a responsibility to change the narrative.

The challenge lies with how others choose to perceive me and how they act. Am I a successful person who just happens to be black, or am I a capable black person?

On a basic human level, it’s wrong that certain people feel uncomfortable coming into a work environment because of who they are or what they believe—people should be evaluated on their competency and character, and nothing else. Positive strides have been taken in the realm of gender diversity, so a potential blueprint has been laid down regarding race.

Reassuringly, I have been encouraged to read statements from the newly appointed chief executive at the FCA, Nikhil Rathi, who said: “The FCA has a role to support a more diverse financial services sector, and this is a conversation that has been evolving in recent years. The Women in Finance Charter is one very important initiative, but I think it is in the interest of the whole industry to consider its leadership, [and] whether it is properly reflecting the society

it serves. I would have an expectation over the coming years [to see] boards and senior leadership of major financial institutions … working hard on these issues to deliver diversity and change culture. If we are not seeing that progress happening, then at some point it becomes a supervisory matter and it may even become a matter that we would need to deal with in how we approve an appointment or not.”

Sustainable cultural change can only persist if people in the right places want it.

It’s important at this time to make a distinction between ‘diversity and inclusion’ and ‘anti-racism’, because they are quite often conflated. D&I is about recognising the full range of a human being: race, ethnicity, gender, sexuality, disability, age, beliefs etc. Anti-racism is about recognising someone as human, because the ultimate conclusion to racism is dehumanisation.

It’s worth casting our minds back to when we were young and had the whole world in front of us. We would look for role models, not just in our own families, but in jobs that we wanted: footballers, celebrities, bankers, mortgage brokers etc. Did those role models look and sound like you, or come from where you did? I would probably guess that, in a lot of circumstances, they did. We are what we see and, if those people are successful in leadership positions, it will only help to inspire.

“I may be the first, but I will not be the last” is something we might hear a lot more in the coming years.

65 Nov/Dec 2020

AN EXCITING TIME FOR INNOVATION IN DEVELOPMENT FINANCE “I always believe if you work hard and learn your trade, then you will be recognised for your achievements,” says Rebecca Murphy, the new relationship director at Paragon Bank. And hard work has definitely paid off for her. After starting her career as a graduate at Goldman Sachs, which sparked her interest in property finance, she took up an opportunity at LendInvest, where her passion for development finance grew. “It is less transactional than other types of property finance, such as bridging or investment, and a large part of being successful in this space is relationship and people driven, which suits my personality.”

Words by

andreea dulgheru

Rebecca Murphy

F

ast-forward to her present role at Paragon, she is now responsible for growing the loan book with both new and existing clients.

Rebecca describes how her job entails looking at new transactions (where, for each enquiry that comes across her desk, all she has is an address and an appraisal on which she needs to form a view); meeting developers working on various projects of different complexities (from a simple house to hundreds of units); and reviewing legal packs, valuations and professional reports—it’s enough to make your head spin. It also requires her to be analytical, technical, supportive, and helpful, often all at the same time. “The relationship director is integral to any transaction, as you are the person responsible for managing all key stakeholders to get the right outcome for everyone.”

Rebecca was buoyed by having her potential recognised by Paragon, and felt that this was the natural next step in her career. “No matter what your position or age, it always feels good to be recognised by your colleagues.” Her decision to join Paragon was also based on its wealth of experience and the chance it offered for learning and development. “The opportunity to work directly with an industry leader like Robert Orr [Paragon’s managing director of development finance] doesn’t come up often. It feels great to be part of a successful team that is growing, and offers a compelling career path.”

For her, working in development finance is a good fit; she likes the idea of being part of a project throughout the whole cycle, and pivotal to a deal where everyone has made money. However, she claims that there is still work to be done in terms of reliability and transparency in the sector. In her view, while there are a lot of alternative lenders, funds, and challenger banks that have a development finance offering, few of them deliver on their promises in a timely

manner without moving the goal posts.

The pandemic has certainly played a role in uncovering some of these shortcomings.

“A lot of brokers and developers have recently experienced being let down or last-minute changes driven by lenders’ risk aversion in the current circumstances.”

Diversity is another area in which she finds the industry lacking, particularly in terms of gender. “Traditionally, the sector is known for being a male-dominated working environment, and that is still the case today, with a considerable imbalance between males and females who sit on the boards of property companies,” she explains. “That said, this is improving and, slowly, people seem to be realising that having a diverse and enjoyable workplace generates better performance.”

Rebecca believes that everyone would benefit from seeing more senior female role models in the real estate development space, and that the key to doing so is to attract talent in schools and universities.

“The property finance industry offers such a range of roles that there is likely to be something of interest to everyone, so it is about breaking down preconceptions about the ‘type’ of people who should work in the sector, and making sure young people are well informed of the different opportunities available.”

Education is paramount to entice more women to consider working in property finance, Rebecca claims. “[Some] larger property companies have started various women’s networks to offer guidance and support to those wanting to develop their career, and this is great for retaining female talent.” However, treating everyone fairly and removing bias from the recruitment process will attract the best person for the job, she says, adding that there are always good opportunities available if you are personable, hard-working and determined.

With Covid-19, there’s no denying that this is a challenging and unpredictable time for the development market. After a period of construction site closures during 70

Bridging & Commercial

the first lockdown period, the industry has slowly got back on its feet. And with new government initiatives to build and keep the housing market open, this is an exciting time for innovation in development.

The stamp duty holiday is one strategy that has been welcomed by developers, Rebecca confirms, saying that it has helped offset a degree of the uncertainty caused by the pandemic. “With sales volumes having increased, there has been a positive knock-on impact on other industries, such as construction and agency,” she observes. But, as we approach the March 2021 deadline, she anticipates a rush from buyers to exchange off-plan, and a subsequent slowdown in sales. “This will also coincide with when the changes to the Help to Buy scheme come into play, so a lull in sales is likely while purchasers adapt to the new normal.”

The new permitted development rights announced by the housing secretary this year have been another significant shift.

Surprisingly though, Rebecca does not think they will have the same impact as the officeto-residential PDR modifications in 2013.

“We’ve not yet seen any new proposals directly associated with this change in the planning process. That’s not unexpected, as it’s still early days.” However, she believes the plans to encourage retail-to-residential conversions could create a substantial supply of new opportunities for Paragon’s clients and, if applied correctly, she hopes it will increase the supply of affordable housing.

“The challenges for developers in assembling such sites of a viable size will be around gaining vacant possession, negotiation with often a wider range of owners, suitability for conversion into modern homes, and alternative use values—especially in lower-priced housing areas,” she adds.

While the stamp duty and PDR initiatives have been seen as somewhat positive changes implemented in response to Covid-19, the pandemic and the two national lockdowns have had a not-sojolly impact on metropolitan apartments,

Rebecca Murphy

driving those in property development to question the future demand for these. When asked for her opinion on this, Rebecca seemed confident that city centre living will continue to be an important part of the housing mix.

However, she believes that developers will have to give more thought as to how buyer preferences in this market are evolving around areas such as fast broadband, flexible accommodation (offering space within a property that owners or renters can turn into a working area) and access to outside space. “In regional cities, including Leeds and Nottingham, I have seen developers increasingly focus on off-plan sales to overseas and domestic investors who buy into ‘turnkey’ properties (typically a new-build home or apartment that they can purchase and immediately rent out), including letting and management services. The developer usually offers property management services to buyers, minimising the time and effort they have to put into the rental, and then charge for it as a letting and management service. It will be interesting to see how many of these developers can successfully roll out this operating model long-term, and whether this will continue to be a growing trend.”

The first-time buyer (FTB) market has also been put in the spotlight recently.

When the stamp duty changes came into effect, everyone expected FTBs to be the ones reaping the benefits. However, the mainstream media portrays a different, more negative picture. As the number of high-LTV mortgage products has reduced, and with many young people having been furloughed or made redundant, the chances for first timers to get on the property ladder now seem even slimmer. Add that to the rising average house prices and the future for this group looks grim.

That said, Rebecca expects this reduction in confidence to be countered by the increased movement of existing homeowners, which she says is making family housing particularly popular. And

“The property finance industry offers such a range of roles that there is likely to be something of interest to everyone, so it is about breaking down preconceptions about the ‘type’ of people who should work in the sector, and making sure young people are well informed of the different opportunities available.

Education is paramount”

there may be a light at the end of the tunnel for the FTB market. “I expect at least two major lenders to return to [offering] 95% LTV by Q2 2021, which will allow FTB purchasers to resume in volume,” she claims. The uncertainty around higher LTV mortgages is likely to be a short-term trend, and Rebecca is optimistic that, once confidence in the market improves, we can expect to see FTB levels return to their pre-Covid rates.

So, what’s in store for this segment in the near future? “It depends what you consider the near future to be,” she replies.

“FTBs have always made up a significant proportion of the purchaser market at around 35%, and demand outweighs supply.

This is not set to change, as there will always be FTBs, and we still have a shortage of housing. What may change is the type of product a typical FTB is looking for.”

In order to enable the overall sector’s success, Rebecca highlights the importance of presenting a well-thought-out business plan when looking to secure finance, where you can demonstrate that you thoroughly understand the market and target audience. This is why, in her opinion, brokers that have a genuine in-depth knowledge of the market with strong lender relationships and can offer clients a range of finance including debt, mezzanine and equity, will thrive—and that those which focus on experienced developers with sites in strong locations will find that good lending terms remain available.

“An experienced broker can add significant value to a developer in sourcing appropriate finance and help guide them through the process. We expect that this will increasingly encourage both brokers and developers to use funders that offer certainty of funding and a consistent approach to being in the market,” she concludes.

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Statement Statement of Intent

It can be said that, as traditional forms of finance become trickier to obtain, brokers’ value increases exponentially—throughout the UK. Despite living in a time when we are told to actively distance ourselves, several firms have taken the step to expand their businesses into new regions to be closer to and better serve advisers and clients. Quality growth in these areas means that lender appetite is likely to follow, effectively increasingly awareness and transaction levels. We ask two brokers, which have this year established offices further afield, about the rationale behind creating these additional bases and the opportunities they’re hoping to capitalise on

Phil Gray, managing director, and Emma Ross, commercial manager, at Watts Commercial Finance— unveiled a Scottish office in September It has always been a dream for Watts to open an office in Scotland. Work from there started to pick up about two years ago, which kept the local BDM extremely busy, but we couldn’t understand why lenders were so seemingly apathetic about the region and therefore did not launch head—or, rather, heart—first into setting up an official base.

It transpires that there are fantastic opportunities there—and not nearly enough brokers. After a soft launch in September 2019 that went incredibly well, we hired two commercial managers [Emma and Dean Thomson, both with banking backgrounds and covering Glasgow and Edinburgh respectively]. However, that was in January and, when the unthinkable

happened, the launch was sadly put on hold. It took a lot of patience, but we got to August and said, “Let’s go for it.”

We’ve been blown away by the volume of enquiries; the demand is massive. Having an established brand behind us has been very helpful in this expansion—there is a track record that people can see and place trust in. Feedback from lenders suggests that customers do not really know how to find the best deals. Because of this, we’ve found our relatively new presence spreading fast among the lending community via word of mouth. There’s a great opportunity here to work with any size of business, but SMEs are really the heart of it in Scotland, especially those which are not caught up in Covid and need support to facilitate the growth and continued success of their businesses.

All Watts commercial managers undertake an 18-month journey to becoming a fully fledged broker at the firm. Phase one (which lasts six weeks) is all about product knowledge; and phase two, the one we’re in now with the Scotland team, sees the recruits go out and talk to their existing contacts to introduce them to the world according to Watts.

Brokers, many of whom Emma and Dean worked with in their previous roles, are relieved to have somewhere to send the deals that were hitherto being rejected—especially considering both managers have transitioned from working at high street banks with strict criteria to 72

Bridging & Commercial

a broker that says ‘yes’ far more often.

The majority of lenders based in Scotland favour the central belt of the country, but there are those that will look at lending in the highlands or rural cities, which is good news for tourism in parts where holiday lets, guest houses and such are popular.

There is also interest from borrowers to purchase hotels, and a fair amount of conversions happening as people take advantage of domestic travel options.

In Scottish cities that are home to the main universities, such as Glasgow and Edinburgh, rental yields are comparatively high, and HMOs make up a big market that caters for students coming to the country— something that investors are flocking to.

It would be great to see more extend their lending into Scotland, although we’ve actually found that more do than their advertising would lead you to believe.

But an increase in people moving from cities like London to Scotland, to take advantage of the available land, cheaper property prices and country lifestyle, may see this climb. By the same token, Scottish people are buying property south of the border and need finance, too.

Lenders perceive us as an extension of their business, in a sense—they know the quality and underwriting will be good.

We think the fact that we’ve provided boots on the ground for those who don’t necessarily want to invest in a presence themselves has generated some excitement from the Scottish-based lenders. Our next move is to open an office in Cardiff, in the first half of 2021—watch this space.

of intent Statement of Intent

Donna Wells, director at First 4 Bridging—opened a support centre in central Manchester in October I’ve worked at First 4 Bridging for 13 years—the last seven and a half based in Surrey—and can categorically say that there is a North-South divide.

In the South, there are a greater and wider variety of higher value properties—and brokers in the North, who don’t deal with these transaction sizes as often, are perhaps less comfortable going to purely southernbased packagers with smaller deals.

Conscious that they were possibly feeling a bit left out, we decided that we wanted to provide the same level of local support for our northern brokers.

Being from the North West, I’ve always had an attachment to it, and I petitioned Myles Williams [CEO] for a presence in the North, with perhaps a couple of BDMs who could visit intermediaries and give them some personal attention—let them know we’re here and that we do appreciate the business they give to us.

So, we sat down and did some research.

As it turns out, there is much to be excited about. House price growth is extremely optimistic in the North West, outpacing London since the 2016 referendum and recovering fastest post-lockdown.

Manchester is a hotbed of regeneration, following the recent announcement of the government’s Future High Streets Fund, and there’s a lot of money being invested in the city. It has comparatively higher BTL yields than the rest of the country and an active BTR market, as well as plenty of developers in need of funding—many of whom, alongside property investors, are currently looking to capitalise on a wide range of property related opportunities.

These regions are operating from a robust platform after a real push in the supply of affordable housing and stronger commercial infrastructure.

Access to alternative forms of finance is vital in maintaining this momentum.

We eventually decided to bite the bullet and commit to setting up an office with people who can really make a difference to our northern advisers. There is only so much you can do when you’re 200 miles away and our core offering, which is bridging, relies on speed—usually not synonymous with relying on post or protracted email chains.

We’ve found that many brokers who physically go and meet their clients also want to see, in person, who they’re handing their clients over to to act as a packager, Covid measures notwithstanding.

It has become apparent that people in the South have found the transition to remote working smoother, as it’s really not too alien to them; northerners tend to appreciate that more personal approach.

Currently, 65% of our business originates from the South and it will be interesting to see where that stands at the end of 2021, in light of this move. There aren’t many specialist finance packagers in that region that have the lender relationships that we do. The more specialists operating in those areas, the broader everyone’s options and the less business will get turned away, in particular from IFAs, who are less familiar with bridging, for example.

While there is still caution around meeting face-to-face, we’ve set the wheels in motion by setting up this office (which was notably easy in the current climate) with the view to it being a long-term investment.

We have added more northern-based lenders to our panel in line with our product offering and have also undertaken an extensive review of the lenders we work with off the back of lockdown, in order to guarantee that we are partnering with those which are competitive,

flexible and, most importantly, have robust funding. Criteria changes abound; building a comprehensive lending panel is an ongoing task that results in strong relationships and better deliverability.

Making the most out of a bad situation regarding Covid and related redundancies, we were fortunate to have access to some great recruits, appointing a manager, Erica Pearce, and several business development executives in the Manchester office.

There will be a concerted effort from the sales and marketing teams to promote our presence and encourage introducers to approach us with their deals that need packaging. Despite the hundreds of messages presuming that our new office meant that I was going to be returning to my roots, I can confirm that I am staying where I am for the foreseeable future!

Is this an indication of First 4 Bridging’s ambitions to expand further? Never say never. We have always maintained that we do not want to outgrow or spread ourselves too thin and risk our reputation for excellence—it would be counter to our commitment to service if we took on too much.

73 Nov/Dec 2020

Rebecca Skellett, trainee case manager at The Property Finance Collective “The lovely thing about the East of England is that it is not particularly built up, so there are plenty of opportunities to build. We have seen a massive increase in the number of new-build developments being constructed in and around the major towns in the East, in particular in Norwich, Peterborough and Cambridge. Developers are keen on the area due to the lower cost to build versus relatively good sales prices. Also, with the good connections to London and Peterborough, it is becoming an attractive area for commuters. There is a great opportunity for brokers that want to specialise in development and bridging finance and, with the number of businesses based around the area, I am sure it is a good time to be in business finance, too.”

Oliver Porter, external business development manager for the East of England at Octopus Real Estate

“The East of England is home to several top employers and popular universities. This encourages a broad occupier base covering experienced professionals, students and young families—demographics that have the potential to make attractive returns for developers.

This could be amplified in the next six to 12 months when developers may be able to acquire discounted or distressed assets, aiming to make a profit through works and renovation. This region is a popular location for owner-occupiers and landlords alike. Since March, and especially since the national lockdown has been lifted, enquiries have remained at impressive levels and we are seeing some diverse deals come through. This demand has been predominantly for both residential bridging and development finance. We are seeing a lot of landlords looking to purchase properties at auction, renovate, and sell for a profit, as well as many office conversions to multiple residential units or large houses.”

The East

Focus on:

It offers a good build cost to sales price ratio

It has appealing commuter towns and transport links

It boasts the highest levels of R&D investment Jonathan Prince, business relationship manager at Allica Bank “When most people think of the East, agriculture and rural business spring to mind. However, the beauty of this region is that it is home to businesses of all shapes and sizes, from large PLCs, such as Greene King, through to thousands of SMEs that make up the backbone of the UK economy. It has the fourth largest number of private sector businesses, just behind London, the South East and the South West. It also boasts the highest level of R&D investment in the UK, showing the drive and dedication of the SMEs there. Despite its strength, it is home to less than 8% of commercial finance brokers, according to NACFB data.”

A flourishing diversity of trading businesses

Marc Champ, managing director at Wharf Financial Services

“Trading businesses have flourished here, with hubs such as Chelmsford, Norwich and Colchester leading the way. With property prices still increasing in this region, property investment and development is also paramount to its success, and I feel that the East of England will blaze a trail into 2021. There are challenges for a lot of businesses in the area this year, but a lot that I have been dealing with have been bucking the trend. Not every trading business has been as fortunate, but, usually, as one industry suffers, another thrives. For instance, we have one customer who is seeing a bumper year with the sale of electric kitchen utensils. Shifts in the economy always bring opportunities and, in the East, the diverse spectrum of businesses has ensured the region stays at the forefront.”

For most, the East of England would be described as a largely rural landscape with medium-sized cities, coastal areas and market towns. But for some, it’s a thriving area of opportunity.

According to Rightmove’s October 2020 House Price Index, the East of England has seen a 1.7% monthly rise in house prices, outperforming every other region, apart from the South West (which saw the same increase). In addition to great property prospects, the East has one of the UK’s highest business density rates. With the economy currently resting on uncertain ground due to the pandemic, it may prove beneficial for specialist finance brokers to gain expertise and build relationships here to help unlock funding.

To find out more, we speak to experts to find out why this region will be a focus for them in 2021.

“There is a lack of lenders based in the East of England, particularly in Norfolk, Cambridgeshire and Suffolk.

A local broker adds real value when assessing deals, particularly when questions surrounding location arise during the packaging process. A broker with strong knowledge of the region and understanding of the merits of each area—especially the smaller and more rural ones—is imperative when appraising a development and its viability. However, opportunities are limited in comparison with the major UK towns and cities, when considering the amount of agricultural and green belt land in the area.”

Alice Williams, director at Pilot Fish

There is room for more brokers and lenders—but beware of green belt limitations

‘I’m trying to reinforce confidence within the industry’

76 Bridging & Commercial

Paresh Raja

Market Financial Solutions (MFS) is funded by a variety of sources and has been consistently vocal this year about its commitment to lend— two facts that are not unconnected. Here, the lender’s CEO, Paresh Raja, talks about the current state of the industry and why its pledge to support the market is with a view to having a longer-term, sector-wide impact Words by

caron schreuder

77 Nov/Dec 2020

Paresh Raja

On lending throughout the pandemic

On MFS’s £60m Covid-19 recovery fund

On the lengthening timescales in bridging

uring Covid and lockdown, unfortunately a lot of lenders have had various controls put on them, resulting in them not being able to lend because the funding lines were being cautious.

Being a lender with different pools of money helps us—even in the worst market.

We’ve had backing from all our investors and our funding lines, and they’ve just said, “Carry on and we’ll support you.”

How you manage risk also matters. We do a lot of reporting to our investors on a regular basis; it’s their money that we are responsible for.

We have found, during Covid, that a lot of borrowers were left in limbo, and we had to support them through adjusting how we could get the valuations done. If there was already one done by a firm that was not on our panel, we got them on the panel. We also encouraged our lawyers to do everything from home, and we accepted scanned signatures which then had to be posted or couriered. It’s all about how you remodel yourself under difficult circumstances.

The Covid fund came about after I spoke to our credit lines to request an allocation that we could have commitment from to deploy. It was intended to assist borrowers whose current lenders were not able to fulfil the funding requirement.

There has been a positive response from brokers because they have certainty of the debt that MFS can deliver.

A lot of developers have completed their projects and have served notices to take over the properties, but banks have taken much longer. So, rather than them losing their deposits, they come to us and borrow the money then sort their investment out properly; it gives them some breathing space.

The three areas targeted for this ringfenced fund were development exit finance, re-bridges and committed transactions that couldn’t be facilitated.

Deals are considered on a case-by-case basis. Our LTVs, since September, are back to normal at up to 75%, and pricing is determined based on the LTV and borrower profile.

We are funding a market that is underserved at present and our products remain bespoke to the specific requirements at hand. At a reasonable LTV of sub-50%, we’ll still offer rates of 0.59%.

Smaller bridging lenders are coming to us and asking for assistance with certain cases, which we are happy to underwrite and take over, while coming to an appropriate commercial arrangement.

I’m not just doing this for MFS. I’m trying to reinforce confidence within the industry—all of us need to work together.

From our perspective, the funds are readily available. However, what I think is happening is brokers and developers are taking longer to go down the route of bridging, spending time working on alternative options first. While it is great that they are shopping around for their clients, this has an impact on the time the client needs to wait for a solution, as there is a delay while all options are played out to find the cheapest— which may not always be in the client’s best interest. As we all know, what starts out as ‘cheap’, doesn’t always end up that way. However, as an industry, I think we are still able to turn deals around quickly— sometimes within a week.

Of course, the UK property market is not just centred on domestic clients; we have borrowers from all over the world. Getting signatures and original paperwork returned is taking much longer. Many legal firms have worked tirelessly to try to complete transactions, and to support the market in getting back to normal.

They must do everything via Zoom, then go back to the borrower’s lawyers, who in turn go back to the borrower; the chain is bigger, and that’s where a lot of time is lost.

78 Bridging & Commercial

Paresh Raja

On brokers’ lender selection processes

On funding transparency and strength

On current trends

On the commitment to lend—even during a crisis

Brokers’ success is built on their reputation and ability to deliver, and they should be taking that seriously from all perspectives. Are extra arrangement fees relative to what that lender can do for their clients, or should brokers be working in the knowledge that the deal will get done first, even if it means earning slightly less? They should also be looking at a lender’s history and longevity in the market.

The broker, when they engage with a bridging lender, has the chance at a double deal (and double fees): the bridging transaction and, if they nurture and look after that borrower very well, the long-term funding.

That’s a tough one, as investors often don’t want to be named, so lenders must be careful. But nothing is stopping us from sharing how we’re backed— whether it’s by a bank, hedge fund, or family offices—it can add a lot of value.

The strength of your funding depends on your relationship with it. All investors understand that there are going to be rainy days and sunny days, but what is important, when times aren’t so good, is that you are reporting to them. Even when things do not go according to plan, you need to inform them and detail what’s being done to rectify it. If a funding line feels like you are being open and transparent, then why wouldn’t it support you?

Equity participation and putting your own money into your lending also adds to the confidence and strength of relationships with investors.

We are seeing a lot of properties being gazumped—and gazundered, too. This leaves valuers vulnerable, as there will understandably be questions asked by sellers and buyers alike about whether their valuation was initially correct. They are therefore having to be very cautious in how they value in this type of trading environment.

Numerous borrowers are looking for longer-term funding, at 12–18 months, giving the market time to settle over the Covid and Brexit periods.

I’ve seen plenty of people capitalising on the stamp duty holiday, as well as requirements for larger loans but, as a lender, do you want to put a £10m loan out, or do you want to advance 10 loans of £1m each?

What does your portfolio look like? Lenders must manage that risk internally.

We are witnessing a fair bit of activity in the suburbs of London and down south, in the Cotswolds, and a migration of people who own flats in London moving out of the city to buy bigger houses. But, on the other hand, we are also seeing youngsters wanting to buy flats in town—now is their opportunity. Manchester and Birmingham are busy in terms of transactions, but I’m not seeing a great deal coming out of the likes of Liverpool and Wales, probably because MFS doesn’t do too much business there.

Bridging lenders exist to provide a bridge; crisis or not—they must be there.

We should be lending, and we should be supported. But, if you are reliant on one source of funding that isn’t committed, then it’s better to be honest and not issue terms to a borrower only to declare that it can’t be done. That is providing false hope and leaves a very bad reputational mark, not just for the lender in question, but also for the industry.

Over the years, we have worked through this journey to rid the sector of its former stigma—it’s a joint effort. We should strive to be recognised by even the likes of the government, which will look at alternative lending and deem it worthy of funding opportunities and support, because we are the front runners in the lending space.

79 Nov/Dec 2020

Duncan Kreeger

THE BRIDGING INFLUENCER

This year has definitely put motivation to the test. With flexible working no longer just an ‘idea’, most of us have seen our past routines and typical day-to-day structures go out the window. However, it’s crucial to ensure that what we replace them with puts a positive work-life balance at its core Duncan Kreeger, founder and CEO of TAB, has been promoting inspiring ways to approach both business and personal life on Instagram over the past 12 months. While most of us were drinking mulled wine and scoffing mince pies in front of the TV last Christmas, Duncan ran a one-man London marathon. There were no streets lined with supporters, he didn’t raise money for charity, and he didn’t tell anyone what he had planned—“I just did it for myself.” He doesn’t care about doing what’s cool, or what he thinks people will respond to. Instead, he espouses the importance of self-care, being present, and that it’s great to achieve something purely for yourself and to celebrate your mental and physical strength.

That is why we asked Duncan to share his routine and top tips for staying on track to help us all start 2021 off with a boost of positivity.

80 Bridging & Commercial

Duncan Kreeger

“My routine changed drastically when I simply started getting up with the sun. I would say I’m up before 5.30am almost every day. There’s nothing more beneficial than learning that there are actually more hours in the day if you choose to get up a bit earlier. There are not many people who are awake at this time, so I have the space I need to think and plan for the day ahead. If I start to miss a few days I find it incredibly hard to get back on track.You soon forget the benefits of your healthy routine and start to slip back into a less productive mindset. Don’t hit that snooze button—it’s a long, hard road back to that rhythm!”

“I’ve trained myself to do the same thing every morning: I wake up and tell myself that it’s going to be a great day. I’m sure that this contributes to me doing so. Too many people’s first thought is to worry about the negatives and consequently set themselves up for a bad day. Don’t let the first sign of bad news or something tricky to deal with steer you off target. Say it, believe it, or even post it on social media—and hold yourself accountable. This works incredibly well for me and has become automatic.

My alarm at 5.15am literally says: ‘It’s going to be an amazing day today,’ which is the first thing I see in the morning.”

Agenda 5am: Wake up 6am: Work out 7am: Clear as many emails as poss 8am: Head to the office 9am: Internal meeting 11am: Client meeting 12pm: Squeeze in food 1pm: Internal meeting 3pm: Client meeting 5pm: Collect kids from school 6pm: Do something fun 8pm: Follow up on emails 11pm: Sleep 5am: Repeat

“Surround yourself with good, positive people. This means making sure that you hang around with family, friends, and colleagues who make you feel happy and motivated. Block out those

who make you feel less worthy, or who are always complaining. It may sound simple but, throughout life, I have found that good people will build you up, and that makes you better.”

81 Nov/Dec 2020

Duncan Kreeger

“I post regularly on Instagram to keep myself honest and to share that I practise what I preach. I feel like the world can do with more positive energy and, if you put it out there, you get it back, so it’s a win-win for me. I use social media as a tool to spread my message. I am not one for watching hours and hours of what other people are doing; I don’t really have the time. I don’t follow every man and their dog (there are a lot of dogs on Instagram) and try not to look at my phone much until I have got up, exercised, showered, and had something to eat. I find that looking at your phone too early, whether that’s to read emails, messages or news, can shift your mindset off target. Try to take some time every day for yourself. People use social media in many different ways, and my key drivers are to stay connected and to share my thoughts. It’s almost like therapy for me.”

“I try to limit time spent thinking about things that I can’t affect or change. I like to play with the tools I have been handed and make the very best of them in the circumstances. So many positives came out of the first lockdown… Obviously there were tons of difficulties and issues, but there were some amazing parts, too.

Spending additional time with my two young boys was by far the biggest bonus. As you look for new ways to transform with the times, you need to try things and see what works and how your mind and body react. I look at the lockdowns, which are inevitable, and try to think about what I can do to improve myself and my surroundings for those who are important to me.”

“I hear too often that one can’t find enough hours in the day but they still manage to sit around watching pointless TV. Social media can be a powerful tool to connect you with like-minded people and I’m happy to talk to anyone who has questions or wants to be engulfed with positivity.”

82 Bridging & Commercial

The Platform for Development Finance and Bridging Lenders Aurius DF from Apak Group, a Sopra Banking Software Company, is the only platform targeted specifically at the UK Development Finance and Bridging Market.

Lending for Development Finance presents unique challenges: •

The flexibility demanded by the highly changeable nature of the projects being funded

•

The need to monitor complex deals to make sure they stay within their agreed parameters

•

The involvement of brokers and multiple third party professionals

•

The requirement for close management of the relationship with the developer

•

The difficulty of producing clear, consolidated business information in order to be able to manage risk and predict cash flow

Meeting these challenges is vital to a successful Development Finance lender in order to manage risk and increase efficiency. This helps control the cost of managing these complex loans which ultimately increases the margins available in this competitive and dynamic market.

Based on Apak’s Aurius platform, Aurius DF meets the business needs of Development Finance lenders by providing market specific functionality, including: •

Loan Schedule Modelling (both preapproved and in-Life)

•

Facility Limit, Advance Limit and Loan Tranche Management

•

Tracking of involved Brokers, Third Partied and Professionals

•

Guarantees and Security Monitoring (including tracking constantly moving LTVs)

•

Notes and Diary Management

On top of the Development Finance specific functionality, Aurius-DF clients benefit from access to all the underlying Aurius platform capabilities: •

Open API access through the Aurius connectivity suite

•

Configurable, embedded workflow and document management

•

Tried and tested accounting, payments and transaction handling

Delivered using a cloud-based Software as a Service model, unlike traditional software delivery models, lenders have a low cost of entry and pay based on the amount of business handled by the solution.

Want further info?

Continue the conversation and contact us at apak.info.team@soprabanking.com

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Limelight

A snapshot of the podcasts that have inspired us during lockdown 1 Who: Debbie Staveley, CEO and founder of bClear Communications Podcast: The Infinite Monkey Cage, hosted by Brian Cox and Robin Ince Why it was inspiring: It was really good to learn stuff and think of something other than coronavirus! I usually listen to them while running or cycling—I hate running, so it takes my mind off of it by giving me something else to concentrate on. I’ve listened to the whole series as it makes science accessible, and it’s funny. I particularly liked the one on dinosaurs (bizarrely, I’ve always been fascinated by them) 2 Who: Caron Schreuder, managing director at Medianett Podcast: How to Fail, hosted by Elizabeth Day Why it was inspiring: One of my favourite episodes is the one with Alain de Botton. I am not necessarily a keen follower of philosophy (usually finding it quite intimidating), but Alain’s measured, sobering approach feels anchoring in this time. His words feel far more like digestible reason, rather than high-brow theories that I quite frankly don’t have the headspace for right now. Rather than inspire me, it reminds me to slow down, take one day at a time, and learn to appreciate amid the mess we’re in.

I’d encourage people to listen to Alain in order to derive some sense from what is going on right now. He provides thoughtful, simple frameworks through which to cope and stay grounded when, let’s face it, most of us want to scream and/or hide (also fine) 3 Who: Andrew Gardiner, director at Saxon Trust Podcast: The School of Greatness, hosted by Lewis Howes Why it was inspiring: This has provided me with inspirational listening over the summer, and offers a varied series of shows that generally come out every few days. They feature guests who have motivational or intriguing stories to share, and I find that they help to focus the mind when we are in a bad news cycle. Episode 983 on 22nd July, which covers negative self-talk and building successful habits, is a particularly interesting one, covering subjects that are increasingly important when it comes to the changing work patterns brought about by lockdown 4 Who: Danny Carter, managing director at Collective Mortgage Network Podcast: Hidden Brain, hosted by Shankar Vedantam Why it was inspiring: Hidden Brain is a podcast that covers topics that introduce new or unusual concepts about the world and the people in it. Each episode has a mixture of science, as well as great storytelling to keep you entertained and distracted from what’s going on around us. One episode, ‘Finding Meaning at Work’, covered ideas around discovering new ways to solve work troubles, or simply changing the way you work to improve things.

It is tough for a lot of people at the moment, but this podcast may help us think a little differently about the situations we find ourselves in 5 Who: Nick Russell, sales director at TAB Podcast: The Joe Rogan Experience, hosted by Joe Rogan Why it was inspiring: I really enjoyed episode 1080 with David Goggins, a retired Navy SEAL who has served in Iraq and Afghanistan. His life story, which is discussed in the interview, is fascinating. His main lesson is that when you think you’re done, both physically and mentally, you’re actually only at 40% of what you’re capable of. It has motivated me; when I think I can’t do any more, I remember David and his story and know that I’ve still got more and that by continuing to push I can achieve further success. Whether that’s in the gym, at work, or even being a father and a husband—you just need to have the mindset and belief you can to tap into it. This is great for anyone who’s looking to go that bit further in life, or has simply plateaued or hit a mental wall 6 Who: Amy Lange, media relations manager at Paragon Bank Podcast: Happy Place, hosted by Fearne Cotton Why it was inspiring: Each time, Fearne has inspirational people on to interview, and it usually involves them talking about their life journey and what they have learned along the way. It makes you realise that many celebrities, who we often envy in some way, have also been through hardship or overcome obstacles in their lives. Fearne herself is a very uplifting individual to listen to! I particularly enjoyed the episode with Joe Wicks. It inspired me because he had a tough childhood, but that motivated him to become the person he is today and do what he has done in encouraging people to stay active 7 Who: Jason Berry, group sales and marketing director at Crystal Specialist Finance Podcast: The Tony Robbins podcast, hosted by Tony Robbins Why it was inspiring: While sometimes the content can be a little OTT, he frequently shares the platform with many successful entrepreneurs and coaches who offer up their journeys. A couple of my favourites include his interview with Sara Blakely, who founded the American underwear company Spanx. Her tales around embracing failure and then using this constructively to execute plans better, rather than just quitting, are truly inspirational. I also enjoyed Tony’s interview with legendary basketball coach John Wooden. I have little basketball knowledge, but it did not matter. The conversation educated me on the importance of working to the highest possible standards and constantly practicing what you’re great at, rather than focusing on what you’re not good at. Building teams with complementary skills was always at the heart of John Wooden’s phenomenal success, and is something I have tried to undertake when putting my own together.

This podcast takes me out of the mortgage industry bubble, and I’m sure others will find nuggets that will resonate with their day-to-day working lives 8 Who: Mike Walters, sales director for property intermediaries at United Trust Bank Podcast: Lockdown Parenting Hell, hosted by Rob Beckett and Josh Widdicombe Why it was inspiring: I love what I do, so I’ve no need for motivational podcasts when I am winding down after a long day. However, as a dad of one, and with another arriving imminently, it always makes me smile, and sometimes laugh out loud, and helps me to put the challenges of everyday life into perspective. My favourite episode is the one with Eddie Hearn. He doesn’t hide the fact that he’s a silver spoon kid (his words, not mine), and he’s obviously exceptionally successful, but he still keeps the interview real and honest around the challenges of bringing up children both in lockdown this year and while managing a busy career 9 Who: Jonathan Sealey, CEO at Hope Capital Podcast: Talking Sopranos, hosted by Michael Imperioli and Steve Schirripa Why it was inspiring: I’ll be honest, it’s a podcast about a mafia TV show, so I wouldn’t say it inspired or motivated me. It was just an escape for an hour or so, as it took me away from the stresses and strains of lockdown. I just love the series and re-watched it during this period, so having two of the main characters dissect each episode while interviewing other characters from it appealed to me. If you have watched the Sopranos and loved it as much as I did, I would highly recommend it 10 Who: Lynn-Marie Jameson, interim sales director at Optimum Finance Podcast: The Brendon Show­—Re-engage with your best self, hosted by Brendon Burchard Why it was inspiring: This particular podcast reminded me to take a step back, be aware of my mindset, and plan for potential things that could throw me off my course of work for the day. Brendan suggested some thought-provoking points about why people behave the way they do. These are insightful if you have a team of people to lead. My favourite episode is ‘The WHY behind your Goals’, which reminds us to be grateful to those people around us who believe in us. I’m lucky to be surrounded with positivity at home, and at work; I always try to put a positive spin on any challenge. Maintaining an optimistic mindset and focus is key to realising your dreams

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