Former Man Group and Octopus Real Estate execs launch Silbury Finance
Former Man Group and Octopus Real Estate executives have launched an Oaktree-backed development lender called Silbury Finance.
The platform seeks to provide bespoke senior development finance solutions for property professionals active in the UK residential, retirement and student accommodation sectors.
Matthew Pritchard, formerly head of European real estate debt at Man Group, and Gavin Eustace, formerly head of residential development at Octopus Real Estate, have founded the firm.
Silbury Finance intends to underwrite loans typically in the £10m to £150m range with a loan-to-value (LTV) between 60% and 70%, and is targeting £500,000 of lending in 2021 and up to £3bn of lending over the next six years.
The firm is seeking to capitalise on growing borrower appetite to partner with experienced property lending professionals to access flexible bespoke loans.
Silbury Finance believes that credit supply in the segments targeted is constrained in part due to the decreased capacity of UK clearing banks to lend to certain real estate sectors.
Pritchard said: “Middle-market residential developers continue to be hugely underserved by the lending markets, and we expect the current uncertainty to only exacerbate this trend further.
“Swathes of UK lenders, comprising both the high street banks and alternative lenders, have retrenched due to uncertainty generated by the COVID-19 pandemic and are committed to managing their current loan books.
“Large debt funds continue to seek the higher returns available from the large single ticket loans.
“With the backing of Oaktree, a deeply experienced global real estate investor with a track record of entering structurally supported yet dislocated markets to create market leading products, we believe that we are ideally positioned to be the preferred long-term capital partner to a range of borrowers.”
Eustace added: “The UK residential sector, which was already benefitting from a number of favourable structural trends, has further demonstrated its defensive and countercyclical characteristics during the pandemic.
“Against a structural backdrop of undersupply of residential real estate in our target markets, the case for debt financing remains strong and we look forward to closing on our near-term pipeline of opportunities, employing a prudent and disciplined approach to lending.”