Glenhawk to accelerate lending activity as it secures further institutional backing with £25 million mezzanine funding line. A favourable market backdrop has seen Glenhawk generate a record £434 million of new enquiries since August as it targets half a billion pounds of lending by 2022.
Glenhawk, the fast-growing UK challenger lender, has agreed to a £25 million mezzanine funding line with Balbec Capital, the global private investment firm. It will support the senior funding line Glenhawk secured with J.P. Morgan in March as it targets growing the UK loan book to £200 million by the end of 2021.
It represents the first time that Balbec Capital, which has invested over $6.5 billion in 20 countries and specialises in investments and joint-ventures in alternative credit opportunities, has partnered with a UK bridging lender. The funding line, which was arranged and closed since the start of the Covid-19 pandemic, will be used to underwrite both regulated and unregulated bridging loans.
Glenhawk launched its first regulated bridging product last month, for borrowers looking to secure finance against their primary residence, which marked its entry into the £250 billion UK homeowner mortgage market. It has also recently extended its geographical footprint making its products available to borrowers active in the Scottish real estate market.
Guy Harrington, CEO of Glenhawk, commented: “This is an important milestone for Glenhawk, which will allow us to accelerate our lending activity in response to unprecedented borrower demand. It also underlines the attractive returns available in the real estate alternative lending sector, underpinned by the retrenchment of the high street banks and lower for longer interest rate environment. The whole process was undertaken remotely, a major achievement but one that is testament to both parties eagerness to work together. With the recent vaccine announcement offering real encouragement for the UK’s recovery from the impact of the virus, we look forward to 2021 and hitting our ambitious lending targets with confidence.”
Rob Ryan, a partner in Balbec Capital, added: “We are excited to be able to partner with Glenhawk. We have been impressed by the way it has led the implementation of institutional style practices across the sector and, in particular, by its robust underwriting process, which has resulted in the strong performance of its existing loan book. Alongside J.P. Morgan, we look forward to supporting Glenhawk as it looks to build on the momentum of recent months.”
Glenhawk has seen exceptional demand for its short-term lending products since the outbreak of the Covid-19 pandemic. It has enjoyed a record three month period between August and October, generating £454 million of new loan enquiries, as favourable government stimulus, including the stamp duty holiday, alongside the ongoing retrenchment of high street banks from the sector, underpinned borrower interest. Reflecting the buoyant market conditions, UK gross bridging loan volumes saw a 46% increase in Q3 2020.
Nick Hare, Head of Capital Markets at Glenhawk, commented: “We are very much looking forward to working with Balbec Capital, an experienced global investment firm with a vision and ethos that aligns closely with Glenhawk’s. With this funding structure now in place, it allows us to build on the momentum of recent months and benefit from the favourable market conditions underpinning demand for bridging loans from both property professionals and homeowners.”
