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I can think of very few UK Fintechs that dominate their sector as successfully as CapitalRise who have something of a monopoly of being the only independent prime real estate property finance provider. Not only that but to date they have an unbeatable 0% loss-rate on loans that have returned ~9%pa to investors. The Credit markets really reward detailed expertise – an obvious conclusion perhaps, and yet so many new Fintechs launch into a sector with relatively superficial expertise and just a desire to “innovate”.

Rajah.jpg">Rajah-150x150.jpg" alt="" width="150" height="150">In this episode we dive not just into the secretes of CapitalRise’s success but also generic lessons for Fintech and FS success as a whole.

CEO Uma Rajah shares what it was in her career that led to being able to deliver these results, including founding a Fintech which didn’t.

All of these topics perhaps point to the continuing maturation of the sector. FS is super-specialised and so is it much of a surprise that sectoral-specialists and older wiser folks who have scraped elbows along the way are dominating most UK Fintech sectors right now?

Topics discussed include:

• holes in the space-time continuum
• the art of making excuses
• CEO-ing and mothering in parallel when WFH in Covid mode
• property market ahead of others being back in the office as construction has continued regardless
• young founders vs middle-aged founders
• Uma’s career journey and key learnings along the way
• starting a Fintech in 2007, which turned out to be one year ahead of the 2008 near-collapse of FS
• key lessons learned from founding that Fintech
• working at Wonga and the challenges they overcame
• CEO-ing CapitalRise since 2015
• defining the Prime Property sector and its characteristics – absolute and relative value criteria plus selected geographical areas
• super-prime is easier to define as £10m+
• CapitalRise lend from £1m-£10m with some loans up to £20m, average loan size around £6m
• they do around 1 or 2 loans per month; to date have lent against assets worth £480m,
• bridging loans, development loans, sales period loans
• essential nature of specialist knowledge in this sector
• Prime Estate bounces back up to 3x faster after market dips
• during 2020 despite all the challenges and lack of travel the market has held up well
• why London market is strong despite everything
• micro-location knowledge
• the value of developers on their credit committee – an interesting concept – haven’t come across credit analysis involving the sector and not just a bunch of bankers who think they know better…
• deep memory cf MotoGP
• repaid to investors ~£55m of development loans that were all Covid-impacted, despite delays changes of work processes etc
• the key importance of operational management of the ongoing risk in complex sectors to head off problems before they occur
• CapitalRise’s approach and how this had to change during the Covid period of higher risk for development projects
• restructurings and backup plans
• “active loan management”
• last year CapitalRise screened >£5.5bn of loan inquiries :-O (up from ~£3.5bn last year)
• repurposing of assets
• Prime prices are ~20% below 2014 peak
• CapitalRise have more than doubled in past 12mts
• shoutouts for investor base from HNWI/sophisticated investors to institutions and borrowers
• average rate of return has been a super-impressive 9& pa secured over a prime asset as security
• diversity of capital sources from a crowdfunding platform to many types of institution

And much much more

Share and enjoy!