Anthony Hilton: Let’s applaud the lenders
who stepped in where others feared to tread
Without a timely loan five years ago Sunseeker would have failed
Saturday 22 June 2013
On Thursday it was announced that a Chinese company, the Dalian Wanda Group, wanted to build what would be Europe’s tallest residential block at Vauxhall in London. Separately it also agreed to pay £1bn to buy Sunseeker, a Poole-based firm whose craftsmen build seriously upmarket yachts.
Five years ago Sunseeker was on its uppers when its markets collapsed almost overnight. The financial crisis sent all its wealthy buyers running for the hills – terrain where they don’t have much need for boats. Sales and profits collapsed and the firm was within an ace of going bankrupt.
That it didn’t go to the wall was due in large part to a loan from a company called Hayfin, which was prepared to step in where the banks feared to tread and put up a £25m loan to stabilise the business. That bought Sunseeker time, and meant it was still in business when its customers got their nerve back and wanted to buy again.
Hayfin, based in Jermyn Street in London, is four years old, and operates like a bank in that it lends money, but it is not a bank.
Tim Flynn, who runs it, says that savings today are not lodged in bank deposit accounts, but are to be found in the world’s pension funds. It is these that he taps for the money he needs to lend, rather than looking for retail deposits, as banks have traditionally done. The pension funds contribute to a pool of capital which the Hayfin team lends out. The interest on the loans gives the pension funds their return, while Hayfin charges a management fee for making it all happen.
It has got about 50 people, mainly in London, but with foothold offices across Europe. It is growing at between 30 per cent and 40 per cent a year, and has a loan book which already runs into the billions. It is nimble, entrepreneurial, financially sophisticated and courageous – as indeed are the many other small firms coming into this space, and one suspects that the future belongs to firms like it, rather than the big high-street banks that the Government is so keen to return to the private sector.
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