What entrepreneurs need to take their business to the next level and what traditional lenders are prepared to finance can be very different things.
ThinCats Investor Conference - October 2018
Thank you to those lenders who were able to attend the Investor Conference in London on 11 October. The purpose of the conference was to update investors on the large number of changes that have been taking place at ThinCats over the last 18 months.
John Mould, ThinCats CEO, started the conference by welcoming lenders and explaining the complete transformation of ThinCats since being acquired by ESF Capital, particularly in terms of how loans are now originated and graded following substantial investments in business development, credit and data analytics teams. John highlighted that continuing professionalisation of the business will lead to more repeat business from borrowers and their advisers and increasing numbers of better quality loans in which investors will be able to invest.
Chief Development Officer, Damon Walford continued the theme by explaining the build out of ThinCats’ origination team across the UK and how ThinCats’ hybrid model of combining excellence in data analysis and modelling with old fashioned relationship management is catching the attention of the commercial finance intermediary market.
The growing appetite of institutional investors to fund SME business loans was covered in Managing Director, Ravi Anand’s update. Ravi cited the recent announcement of £300m of new funding capital from Insight Investment as one example of why institutions increasingly want to invest and the due diligence processes they follow to reassure themselves about the credentials of potential partners such as ThinCats. This has a number of knock-on benefits to retail investors in terms of the credit process and the long-term quality and volume of loans that will become available.
Greg Beamish, Head of Credit, dug a little deeper into how ThinCats assesses potential loans and how the risk profile of the recent loan book has reduced dramatically over the last two years since ThinCats brought the credit function in house. Greg also highlighted the differences between asset backed and cash backed deals and how the experience now available across the team is invaluable in creating bespoke funding solutions for clients. Abokado, the London based fast casual dining business was used as a case study.
Chief Risk Officer, Jill Sandford explained the role of the Transaction Support team in pulling a deal together pre-listing on the platform and how the Monitoring and Recoveries team work to maximise returns for investors when borrowers default on loans.
John Mould gave a brief update on the potential impact of the Financial Conduct Authority’s recent consultation paper on the P2P and investment-based crowdfunding platforms. The consultation process closes in October although it may be next year before any regulatory changes are introduced. John thinks a likely change is that investors will need to disclose more about their investment experience and understanding of risk before ThinCats can accept their investments. John also updated lenders on IT developments
Finance Director, Matt Jones finished by announcing two new initiatives for retail investors. The first was the launch of the ThinCats Diversified Loan Portfolio, which is designed to give instant diversification across a portfolio of 25 existing loans with an investment from only £1,000. The second was the launch of the ThinCats Innovative Finance ISA which is now able to accept 2018/19 tax year subscriptions. We hope to be able to accept ISA Transfers from 2019.
Feedback from lenders that attended the conference has been positive and we aim to keep you informed as further developments occur.