Andrew Bloom

Will Masthaven's founder make Spring bloom?

Transitioning from accountancy to private equity investing and retail banking, Masthaven Bank’s founder Andrew Bloom (pictured above) has a track record as an entrepreneurial chameleon. So, can he do it again at Spring Finance?

At the end of the nineties, first- and second-charge loans were loosely regulated in the UK. It wasn’t until 2004 that mortgages became governed by the Financial Services Authority. Second charges would retain their ‘light touch’ status under the Consumer Credit Act for many years after.

Lending was a different world to the tightly regulated and closely scrutinised industry of accountancy and investment management, where Andrew spent the initial stages of his career.

While some brokers in nineties mortgages were soaking up extravagant corporate hospitality, KPMG—where a young Andrew started his journey—was teaching its junior accountants the importance of fairness, independence, transparency, and probity.

Becoming qualified

Long before taking the leap to establish a major UK challenger bank, Andrew worked hard to pass his accountancy exams while working at the ‘big four’ firm, qualifying at 23 years old. After that, he moved into KPMG’s M&A team. Between 1997 and 2002, he learnt the basics of good governance, how to conduct due diligence and, more significantly, the inner workings of private equity.

Andrew’s hard work didn’t go unnoticed. At the age of 27, a former senior colleague asked him to join investment advisory boutique, Strand Hanson. “It was there that I learnt a great deal about property,” he said. “What I found interesting was, while there was a lot of effort put into the property side, there was rather less effort applied to understanding the financial side.”

Andrew continued in his role as an investment manager at Strand Hanson for a year, before taking the decision to set up in the specialist finance market. “Even in my late twenties, I always wanted to do something entrepreneurial,” he recalled. “Of course, you need to earn a living, and it comes to the point where you think, ‘Am I going to do it?’ Looking back, I’m not sure if I was brave or foolish when I finally did strike up the courage.” 

At the time, sceptics were, no doubt, forming their own opinion. When Andrew incorporated the company, which would later become Masthaven, in 2005, his wife was pregnant and self-employed. Despite this, he was certain his business idea was a winner, sinking £50,000 of his own hard-earned cash into the project as working capital. 

“I promised myself that if I couldn’t achieve this, I’d go back into the City with my tail between my legs. Fortunately, it worked out.”

Andrew secured a funding line with NatWest and gained the support of some initial investors prior to starting his new enterprise. It meant he was able to begin hunting for clients from day one. However, he couldn’t pay himself for the first year. Instead, he used that money to attract some colleagues to assist with the administration, initially hiring two support staff. 

In creating Masthaven Finance (as it was called prior to securing its banking licence much later), Andrew managed to land subsequent senior debt lines from Clydesdale and Icelandic lender Kaupthing Singer & Friedlander in the years that followed. The business was profitable. The investor base was growing. Things were taking off in a big way. Then everything changed.

Cold winds blow

In late 2007, the specialist market had already started to see lenders disappearing. As the early days of the credit crunch played out, ripples were going through capital markets. By early 2008, intermediated specialist lenders were becoming an endangered species — and Masthaven was not immune to the turbulence ahead.

“I got a call from a senior person at Kaupthing,” Andrew recollected. “Even now, 14 years down the line, it sends a shiver down by back.” It was the call that every specialist lender dreaded. “I just want to let you know that we are going into administration,” Kaupthing’s representative told him. “I’m phoning clients to let them know.”

Andrew remembered stumbling over his words as he attempted to craft a response. “What about all of my clients who are relying on Masthaven to complete their property transactions?” The Kaupthing officer responded: “I am making my calls. I suggest you make yours.”

It was at this point that Andrew appreciated, perhaps for the first time, the lessons learnt from his conservative accountancy background. His decision to cultivate three funding lines was to protect the business in the months that followed. Over the next year, all three would eventually fail — luckily at different times. This ensured he was able to arrange replacements. “It’s one of the things I am most proud of,” he said. “Throughout the credit crunch, not one investor lost a penny. I lost money — we became landlords and developers — but the business’s P&L was resilient, so no stakeholders [other than me] lost a penny.”

This track record throughout the crisis was later to be lauded by investors and regulators alike. 

Attracting big names

In 2010, Masthaven attracted the interest of two investors. William Pears Group would eventually make a significant investment in the company, providing a significant catalyst for growth between then and 2015. In 2014, Andrew began proceedings to turn Masthaven into a bank.

“It was another moment of madness,” he divulged. “It took two-and-a-half years to get the banking licence and put the team together. Masthaven became 200 people. I was the majority shareholder of a bank; it was my first job in retail banking, and it was as CEO.”

Two years after its launch, Andrew sold most of his stake to US investment group, Värde Partners, in 2018. After some obligatory gardening leave, he then started thinking about his next opportunity.

The future

In October 2021, Andrew bought the majority stake of specialist lender Spring Finance. Originally launched in the chaos of the GFC, Spring had managed to build a talented team and the respect of regulators. Despite this, the business had also seen incredible sadness, with its founder, Stuart Epstein, passing away in 2016 at the age 44.

Having respected what Stuart had achieved, Andrew decided to finance Spring’s entry into other areas, broadening the lender’s range from second charges to bridging and development finance

Having already recruited numerous people he had previously worked with at Masthaven — including Claire Newman, Jim Baker, Ginny Warby and Louise Young — the business is due to announce a new CEO later this year. However, Andrew is remaining tight-lipped about this individual for now.

“Our goal is to be the leading non-bank specialist lender,” he commented, ruling out repeating history and turning Spring into a bank.

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