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2 April 2019

Assetz Capital aims to be 50% institutionally funded by end of 2019

In an exclusive interview with Bridging & Commercial, Stuart stated that historically 95% of the lender’s facilities were funded by retail investors.

However, it is now looking to receive funding from different types of institutions.

Stuart said that he would like to have at least 15–20 institutions funding through its platform by the end of the year.

“And that’s really good for borrowers, because it gives us a diversity of capital.

“It means there’s a big marketplace running where the cost of that capital is sensibly balanced.

“So, it should work out really well for borrowers as well as investors.”

Stuart believed that the biggest change it had seen was institutions investing alongside retail on the same terms.

“And that’s banks, that’s investment funds, that’s family offices investing parts of loans that retail are also partially funding.

“And we’ve got a big UK bank about to start doing the same as well.”

He claimed that this had started to happen within the last six months, but it was now ramping up, with millions coming in from those institutional sources.

“So, that’s what I mean by 50% of our funding coming from institutions.

“[It] isn’t that we’re going to squeeze out retail, but that implies we’re doubling our volume, and that is pretty much what’s going to happen.”

The lender’s current loan book is at more than £400m and Stuart believed that it would increase to up to £1bn within less than three years.

Assetz Capital is currently working on a private investment fund out of Luxembourg, which is expected to launch this month.

The fund will be for more sophisticated investors and institutions.

“The primary purpose of it is to let other institutions — like banks, other investment funds, family offices etc — invest on to our platform indirectly, rather than directly,” Stuart explained, adding, “because the direct side is a lot harder work and they’d rather come through a fund manager who’s experienced with investing with us, and we’re setting up a vehicle to do that with them.”

Assetz Capital will initially be seeding the fund with a £20m raise, but expects it to grow to around £100m over the next 12 months.