Venn Partners LLP has announced the launch of Venn Hypotheken, a new Dutch residential mortgage lender targeting €2bn (£1.6bn) in annual lending by the end of 2018.
Venn Hypotheken plans to offer competitive pricing across the mortgage product spectrum by accessing long-term and lower-margin funding channels that have historically only been open to banks. Its products will be marketed through financial intermediary networks in the Netherlands, which are responsible for around 60-70% of new mortgage lending.
Managing Partner and co-founder at Venn Partners, Gary McKenzie-Smith, described the launch as “an important milestone for Venn” as part of their ambition to expand prime asset-backed lending activities in Europe as an alternative to deposit-funded bank lending.
Venn Hypotheken will finance its loans through a range of long-term financing solutions, including RMBS, fund products and direct investment, with the majority of its funding expected to come from insurance companies and pension funds.
Its access to these markets will be supported by Venn Partners, who in 2014 launched the first publicly placed Dutch RMBS transaction by a non-bank since the financial crisis (Cartesian Mortgages 1 SA) when it successfully refinanced the €500m portfolio of prime Dutch residential mortgages that its consortium had acquired from GE Artesia in late 2013.
Currently around 70% of new origination of Dutch mortgages are provided by domestic banks but this is expected to fall closer to 50% in the coming years in light of the continuing impact of the 2008 financial crisis, with the resulting market share going to more competitively priced non-bank lenders.
Venn Hypotheken’s specialist mortgage team is based in Breda and led by Marc de Moor, who previously built a Dutch residential mortgage business for Argenta, Belgium’s fifth largest banking group. Marc has over 30 years of experience in residential mortgages, social housing funding, retail banking and insurance, and at Argenta he established a successful Dutch retail operation and built it up to include a €15bn residential mortgage portfolio and a €2.5bn savings and complementary life insurance business.
Commenting on the launch, de Moor said: “We believe that the Dutch mortgage market will benefit from the entry of a new lender as it will spur competition and give consumers a greater choice of borrowing options. It is the second biggest mortgage market in Europe, has recovered well with the revival of house price growth and has characteristics, such as a strong intermediary network and a limited pool of domestic mortgage lenders, which makes it very attractive for a non-bank lender such as Venn to expand its operations and build a sustainable business.”
Venn Hypotheken is supported by the Venn Partners’ team in London, including its managing partner Gary McKenzie-Smith who led the Cartesian transaction in 2014 and has worked on the build-out and operation of each of the group’s other lending businesses, including the £3.5bn lending scheme for UK private rental housing which is guaranteed by the UK government.