Laxfield Capital and JC Rathbone Associates in new tie-up

Laxfield Capital and JC Rathbone Associates are collaborating to offer a new debt advisory service to real estate borrowers in the UK and Europe.

The collaboration is called JCRA Laxfield and brings together two long-established names in the real estate debt advisory sector. The two businesses will continue to operate alongside the new offering, which is not a new corporate entity but rather a fee sharing arrangement between the two parties.

JCRA Laxfield “will offer a complete range of debt-related services for borrowers, from inception to repayment” according to the company. It will offer advice on: deal evaluation, pricing guidance, finance strategy, lender selection, structuring, negotiation and credit preparation, hedging and currency advice, execution, loan servicing and loan relationship management.

The debt advisory market in the UK and Europe has become increasingly competitive over the past three years. Eastdil Secured has carved out a large market share since entering the European market in 2012, agency firms CBRE and JLL are bulking up in this area and other specialists and servicers such as Capita Asset Services and Hatfield Phillips are also starting businesses.

Borrowers now have a wider range of finance providers to choose from than they did pre-crisis, with a multitude of new entrants now lending on deals that would previously have been done by banks. As the array of options has become more complex the need for specialist advice has become greater.

“There are many more different types of lenders with different objectives than we’ve ever seen in the past,” managing director of JCRA, John Edwards told Real Estate Capital.

“The 2005 to 2007 period was dominated by banks who really were mainly looking to securitise. Now you have got the banking community, the non-bank fund community and institutional lenders. Those three have totally different objectives.”

JCRA Laxfield will be led by managing director Adam Slater, head of capital management Emma Huepfl and head of transactions Alexandra Lanni from Laxfield together with Edwards, director Jackie Bowie and director Ivan Harkins from JCRA. The combined team will be 50-strong. All employees will remain located in their respective businesses.

“This is not just about running a process to find the cheapest debt and highest leverage it’s quite different from that. We will be thinking about the whole process right through to the repayment on the loan, offering advice on every aspect and the overall financing strategy,” said Huepfl.

“We see the agency firms trying to build capacity in the area but we feel what is different about us is we are very financially focused. Borrowers know about property but a lot of them feel they need help to navigate the debt market as it has changed so much. Many are happy to outsource that finance function rather than carrying a large team in house.”

Risk management consultancy JCRA advises on deals with a traded derivative value of £20bn annually. Laxfield, which has previously concentrated only on advising lenders, including clients such as GIC and MetLife, has originated and managed £9bn of loans since it was established in 1996.

With the two businesses continuing with their everyday functions, Huepfl says the new initiative will be sensitive to any conflicts of interest that may arise.

“Conflict management is really important. We can collaborate when it makes sense to provide a service to borrowers but we can also separate as necessary if any perceived conflict arises. We will obviously need to demonstrate, as any professional services firm would, that we are completely aligned with the client we are acting for on any deal and we have strict procedures on that,” she said.