After 18-months of developing the TB Walker Crips Income from Short Term Lending Fund, the Alternative Investments division of Walker Crips was notified that the fund had attained FCA authorisation on Wednesday 16th June 2013, the very same day B&C was in the firm’s offices.
 
James Allen, Investment Manager for TB Walker Crips Income from Short Term Lending, selected Walker Crips to work with because it embodied the core values and principles that James wanted to put his name to and thought would be in the best interests of its investors.

James told B&C: “From the very first moment that I discussed this idea with Walker Crips, I knew that I had found the right partner to take this project forward. Sean immediately understood the opportunity and identified the key risks so that we could devise as rigorous a product as possible which is testament to the fact that we have now had this authorised by the FCA.”

The founders of the fund, which include Sean Lam, Group Managing Director of Walker Crips, identified that there was and still is a significant shortfall within the bridging market and that there was no such regulated product in the marketplace.

THE FUND

The TB Walker Crips Income from Short Term Lending Fund aims to have funding lines of £30 million for the three specialist lender partners selected for the launch in the first year. No one lender can have more than 50 per cent of the funding available at one time, as a prudent spread of risk.

The fund aims to grow to £300 million over the next three to four years, with a benchmark end figure in sight of £500 million.

Nabarro has advised Walker Crips with respect to the documentation and application to the FCA; T. Bailey is the authorised corporate director of the fund; NatWest is the depository.

THE LENDERS

TB Walker Crips Income from Short Term Lending Fund has selected three lenders to initially work with the fund, B&C heard from each of them:

Laurence Goodman, Group Managing Director of Bridgebank Capital, said: “We were approached quite early on in the process by James Allen, having been identified as one of their specialist lending partners and we are delighted the fund has received FCA authorisation and is ready to go live.

“These funds will blend and complement our lending criteria, alongside our recently announced substantial investment from Pamplona, and further enhance Bridgebank’s ambitions to being one of the major lenders in the bridging sector.

“We wish the team at Walker Crips all the best in securing the targeted investment levels and look forward to working with them.”

Yasin Patel, Director of Mayfair Bridging, said: “As an FCA regulated lender and as a partner to the FCA regulated Walker Crips Fund, we are extremely delighted to be part of this pioneering fund. Not only is it regulated, but James and his team have structured the fund in a way that enables flexibility to lend within our own criteria.

“I can say from everyone at the team at Mayfair, we have been gearing for this fund for a long time and have been working very hard to make it a reality. This fund is the first of its kind and to be a part of it shows the level Mayfair Bridging, alongside our own peer-to-peer proposition, has now reached to innovate new products to the bridging loan market, which will enable us to place our position as a top tier lender.”

Paul Munford, CEO of Century Capital, said: “I am pleased to confirm that Century Capital has been chosen to distribute the first regulated bridging fund. The fund will offer a substantial new funding line to Century and its participation is testament to the skills and experience of the senior staff involved in the business.

“I have operated in a regulated environment for over 25 years and I’m conscious of the requirements of a lending business. We have worked closely with the fund in developing the product and I’m sure our competitive proposition will be well received in the market. Service is our key, with fast turnaround times coupled with a reliability of funding ensuring Century will represent a good addition to the thriving short term lending market.”

Having a minimum of three lenders helps the TB Walker Crips Income from Short Term Lending Fund satisfy the FCA’s requirement of a prudent spread of risk.

PRODUCT CRITERIA

B&C was informed about some of the product criteria the fund has set, which include:
-    FCA authorised and regulated;
-    UK-only property – excluding Northern Ireland;
-    Loan applications will be approved within 48 hours
-    Only 1st charge lending;
-    Funding primarily available for residential;
-    Commercial funding also available in certain circumstances;
-    LTV up to 70 per cent; and
-    Average LTV is predicted to be under 60 per cent.

INVESTORS

The regulated bridging fund entering the market gives investors a further choice to their portfolio and a choice that hasn’t been available before:
-    8.4 per cent (gross) returns per annum;
-    Monthly coupon of 0.7 per cent (gross); and
-    Minimum investment £20,000.

FUTURE

James Allen added: “Property investment has made some of the largest fortunes in the world. In today’s economic environment, effective due diligence and the correct partners are vital. With the collaboration of our excellent partners, I feel that we have designed a robust yet exciting fund based on UK property that will offer an attractive proposition for investors.”

The Alternative Investments division of Walker Crips has certainly opened up a new market and a form of lending which, not only has been authorised by the FCA, has never been seen before with the fund launch.

B&C will watch with growing interest, as I’m sure many intermediaries, lenders, and investors will, on what is seemingly the first sign of a shift towards regulated bridging finance.