The founder of niche UK real estate lender Dragonfly Property Finance, Jonathan Samuels, has launched a property bridging finance provider with the backing of private equity firm Pamplona Capital Management.
The new firm, Octane Capital, will provide short-term loans for up to 24 months. The firm will finance residential and commercial property borrowers with loans of between £100,000 and £25 million.
The firm describes itself as a “product-less” lender which prices loans “according to risk, not loan-to-value” and which will not offer a fixed product sheet.
“Even in the alternative lending space, lending is becoming formulaic with pricing set according to LTV,” Octane managing director Mark Posniak told Real Estate Capital. “We consider the strength of the borrower, quality of the asset, plausibility of the exit strategy. We’ll look at what we feel the risk is and price accordingly.”
Posniak said that the firm could go to 75 percent LTV, although 70 percent is more reflective of the current market. He added that the firm has 38 UK deals in the pipeline, with an aggregate value of more than £50 million.
Samuels founded Dragonfly, which has since rebranded as Octopus Property, in 2009. The former head of residential mortgages for South Africa at Standard Chartered left Dragonfly in October 2015 and founded Upfront, a car finance platform for Uber drivers.
Alongside former Dragonfly/Octopus managing director Posniak, the Octane team also includes Matt Smith, former Dragonfly/Octopus head of credit and former head of bridging at Wellesley, Tom Clark. Justin Cooper, formerly senior business development manager at Octopus has joined Octane in the same role.
“Loan-to-value clearly has a role to play for any lender, including ourselves, during the assessment of risk. But in our industry we believe there is a huge over-reliance on it that can work against lenders and borrowers alike,” Samuels said in a statement.
“Charging someone X percent if they have a 30 percent deposit and Y percent if they provide a 40 percent deposit is often misguided, as the borrower with the smaller deposit can be less of a risk once you drill down into the detail,” Samuels added.