Glenhawk founder Guy Harrington has always been sceptical of remote working. So when the UK was plunged into lockdown on 23 March, he was nervous.
“I was obviously quite concerned as to what was going to happen and how well we would work remotely, and I was pleasantly surprised,” he says.
“Having someone on hand to ask a question is very easy and Zoom can be complicated, but we adapted really well to it.”
The challenger lender has also adapted well to the challenging environment created by the pandemic.
Earlier this year, Glenhawk secured a funding line with JP Morgan and this month, it agreed a new funding line with Balbec Capital. So what’s the secret of Harrington’s success and how does he see the lending market panning out over the coming months?
Harrington launched Glenhawk in January 2018, with the backing of Rightmove founder and former Countrywide chief executive Harry Hill. The challenger lender received a £75m funding line in September that year from Shawbrook and Insight Asset Management, and last year its loan book passed the £100m mark.
In March this year, just before lockdown, Glenhawk agreed a £200m funding line with JP Morgan, which supported its plans to increase its maximum loan size from £3m to £5m. It was JP Morgan’s first private securitisation backed by UK bridging loans, and was described as a significant milestone for the firm.
Then, earlier this month, Glenhawk agreed a £25m mezzanine funding line with private investment firm Balbec Capital, which represents the first time the private investment firm – which has invested more than $6.5bn (£4.87bn) in 20 countries – has partnered with a UK bridging lender.
The line will be used to underwrite regulated and unregulated bridging loans.
Bridging is a great place to cut your teeth, but then you want to diversify your product range
“Since closing the Balbec facility, which essentially allows us to leverage the JP Morgan facility, business has been very strong,” says Harrington.
“I think it has been a mix of launching our new regulated product [in October, Glenhawk launched its first regulated bridging product], which allows homeowners to borrow from us directly.”
Glenhawk has generated £434m in new enquiries since August and is targeting £500m of lending by 2022. Harrington adds that the company has also seen above-average demand for its short-term lending products since the outbreak of the pandemic, reflecting buoyant market conditions and a 46% rise in UK gross bridging loan volumes increase in the third quarter.
But while Glenhawk appears to have gone from strength to strength during the pandemic, some lenders have not been so lucky.
“Sadly, we’ve seen other lenders fall out of the market, whether it’s due to restrictions on funding lines or a change in appetites,” says Harrington.
“This has made it a less competitive market and given us a bit more market share.”
As 2021 approaches, Harrington is keen to grow Glenhawk’s market share further and says he is planning to launch longer-term homeowner products, moving away from bridging and development loans.
“I think bridging is a great market and there are some great players there,” he says. “The companies I admire have grown with scale from bridge lenders to multi-billion-pound lenders. I think bridging is a great place to start and cut your teeth, but then you really want to diversify your product range.
“Looking at the longevity of the loans, our average term is nine months, which is a very short duration.”
Harrington says ideally, he would like to build five- or six-year relationships with clients that take them through, for example, a full refurbishment of the asset and then the letting of the property.
“It makes sense [as] we’ve got the clients, we have got the capacity, we have got the platform and we have definitely got the team to look into those sectors.
“It’s all part of the broader strategy of becoming this larger non-bank lender and building on what we have at the moment.”
So what does Harrington intend to do when the pandemic ends and some semblance of normality returns? Will he ditch remote working or is he a convert?
“We won’t totally go back to that five-day-a-week [in the office] model. Being a bit more flexible with the number of hours spent in the office is something we will certainly take forward.”
As he no doubt will the business.