LendInvest’s chief executive has reported “much, much less” activity in the development finance market over the past year and does not see it as a core part of the property lender’s business going forward.
Rod Lockhart, speaking at LendIt Fintech Europe’s Lending Innovation Summit, said that London-based firm sees less growth in development finance going forward than buy-to-let mortgage lending.
“In particular with development finance, over the course of the last year, there’s been much, much less activity in that market,” he said at the virtual conference on Wednesday.
“Developers, because of the macro situation, are less keen to start new projects.”
As such, LendInvest is putting less reliance on development finance to drive growth and sees it more as a complimentary product for its main business, Lockhart said.
LendInvest has reduced headcount relating specifically to development finance but increasing headcount in other areas that are driving further growth, he added.
The platform secured a £500m commitment from JP Morgan in January to help scale up its buy-to-let mortgage lending business.
LendInvest, which has lent out over £3.5bn to date, still has ambitions to go public despite shelving its plans in 2019.
“We’ve always been pretty noisy about seeing this as a public business at some point,” Lockhart said.
However, Lockhart effectively ruled out the possibility of using a special purpose acquisition company (SPAC) to do this – the so-called blank cheque firms that are one of the most talked-about trends in finance at the moment.
“Most of the SPAC activity is in the US,” Lockhart said. “We’re a UK business so there would have to be a pretty compelling reason to list there.
“There’s also the dilution factor. There would need to be a sponsor behind the SPAC that would be adding more than capital at the point of the transaction.”
A Treasury-backed review of London’s listing rules, released last night, has suggested liberalising the rules around SPACs to help London better compete against other financial hubs and grab a share of the booming SPAC market.