LiveMore Capital, the UK mortgage lender specialising in lending to people over the age of 50, clinched a £250m credit facility from Citi in January to help support its offering in the UK, having hired former Lehman Brothers managing director Atul Bajpai as a director back in November.
This week, CEO Leon Diamond and managing director Simon Webb, are in Las Vegas for the Structured Finance Association's annual conference with another aim: to show traditionally US-focused investors the advantages of the floating rate structured products that are commonplace in Europe. They say investors can gain an edge in the UK — where there is a far shallower investor base than in the US.
Diamond and Webb spoke to GlobalCapital about their experience of SF Vegas so far.
How have you found SF Vegas so far?
LD: We got here last night and are hoping to be more successful in our meetings than we were at the tables. Perhaps it was the jetlag.
SW: We’re seeing a lot of US investors looking to UK market to provide better risk-adjusted returns. We’ve got conversations lined up with US insurance firms who are particularly interested in the UK market.
The conference itself is absolutely huge. 8,000 people, it’s remarkable and we’re excited to see the panels with General Stan McChrystal and the macroeconomic and geopolitical outlook with Spider Marks, Allison Binns, Beth Ann Bovino and Kristi Leo.
What is a UK mortgage lender doing at SF Vegas?
LD: We’re a first charge mortgage lender in the UK and the reason we started this business is because of the massive demographic changes happening, not only in the UK but most developed markets.
We’ve got ageing populations and over 50's who are sitting on a huge amount of wealth in their homes as asset prices have increased over the last 30 years. But now there’s a change and it looks like we’re going into a different type of economic environment over the next 5-15 years.
That means people who are living longer, better and healthier lives need to tap into the equity in their house.
In starting LiveMore, we saw products which were quite archaic that came with bad connotations, historically. So, we’ve set up a lending platform that is agnostic to product and offers a full range to be a solutions provider, rather than a product pusher.
Is the product pushing element of things like reversion or equity release mortgages a big factor behind the negative history?
LD: Correct, and it’s typically very siloed. Mainstream mortgages sit in one silo and reversions or equity release are in another, and they don’t cross over.
The UK regulator, the Financial Conduct Authority, have identified this and have changed the regulation on something called consumer duty, which comes into place in June or July this year. This in effect means that if you’re recommending a reversion or equity release product, you have to suggest other options as well. Providing the whole gambit of services allows us to be agnostic.
Why have you come to Las Vegas?
SW: We’ve got a senior funding facility from Citi and we’re looking to grow our platform. We haven’t brought in any external equity investors yet and we’re looking to do that now.
Plus, we’re looking to launch a social bond that is accessible and can be bought on exchange but it will give access to the junior and mezzanine piece in the senior funding. We’ve worked with a consultancy service to create an ESG framework in conjunction with UN Sustainable Development Goals to help market ourselves to the right investor looking for ESG bonds.
LD: We also think we could offer investors a better risk adjusted return with some really strong dynamics coming from the UK. But we’ve built our technology platform [so] that it could be domiciled and we can leverage it into Europe or even the US.
What do you recommend doing in Vegas outside of the conference?
LD: Well, last time I was here I was watching my friend fight in a Jujitsu tournament. He broke a few bones along the way and then I couldn’t sleep because of the interest rate volatility thanks to [former UK Prime Minister] Liz Truss. Hopefully, I’ll be catching a few rays of sunshine that I don’t see in the UK!