The deal will support the bridging lender’s expansion into the growing homeowner mortgage market
Glenhawk, the fast-growing UK challenger lender, has agreed a new senior funding line with J.P. Morgan, which will support the firm’s ambitions to grow its UK loan book to £200 million by the end of 2021 – under the leadership of CEO Guy Harrington. The facility represents the first time that J.P. Morgan has invested in a private securitisation backed by UK bridging loans.
The new structure will support a significant increase in Glenhawk’s maximum loan size from £3 million to £5 million and initially be used to fund a mixture of professional residential and commercial borrowers through the provision of fast and flexible short-term lending solutions.
Having recently received authorisation from the Financial Conduct Authority, the new capital will support Glenhawk’s entry into the c. £70 billion per annum UK homeowner mortgage market[1], with a first regulated bridging product planned for H1 this year.
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Demand for bridging products in the UK remains robust: outstanding loans climbed by 14.4 per cent year on year to a record £4.62 billion in Q2 2019[2]; applications for the year totalled nearly £23 billion, an increase of 7 per cent on 2018; whilst despite the political uncertainty that characterised the UK economic and real estate markets in 2019, overall transaction volumes in 2019 were only slightly down on 2018[3].
‘Guy and Glenhawk marry institutional style lending practices, governance, and infrastructure with a customer-centric approach,’ said Rob Tanna-Smith, executive director of EMEA Securitised Products Group at J.P. Morgan. ‘The quality of Glenhawk’s existing loan book and Guy’s vision to broaden the product offering give us huge encouragement that this will be a successful partnership.’
Harrington is ‘extremely excited by the opportunity whilst also a little humbled’. He said: ‘This is a significant milestone for us, a little over two years since we started out. J.P. Morgan is one of the world’s most prestigious financial institutions.
‘The new funds allow us to enhance our existing product range, whilst providing us with the platform to expand into markets where there is an opportunity for us to replicate our success to date, as we look to continue pushing the boundaries with what is possible in the non-bank lending space.’
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Backed by Rightmove founder Harry Hill, 33-year old Harrington launched Glenhawk in January 2018. Having secured a £75 million funding line from Shawbrook and Insight Asset Management in September 2018, Glenhawk delivered month-on-month loan book growth in 2019. It passed the £100 million milestone by the end of the year, having generated over £1.4 billion of loan enquiries and maintained its record of no capital losses on its loans.
Daron Kularatnam, Glenhawk’s group treasurer, is equally chuffed with the development. He called the firm’s partnership with J.P. Morgan ‘a new phase of growth’. ‘The structuring of what was a complex transaction has been best in class and is a testament to the professionalism and expertise of both teams. We look forward to growing what is already a close working partnership over time.’
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