An interview with Gerard Morgan Jackson: 'There is generally a decreased appetite for risk from many lenders'

In an interview with Development Finance Today, Gerard Morgan Jackson, head of structured finance at United Trust Bank (pictured above), talks about maintaining relationships, and concerns for the specialist finance industry.


What are the best ways to create and maintain relationships in the specialist finance industry?

It’s very much a people business, so there’s a strong focus on getting out and meeting with customers and contacts as often as we can. Specialist banking always demands a personal service. These days we’re just as likely to get together with clients and potential new customers for a run, at the gym or a triathlon as we are to meet them for lunch or the usual corporate hospitality events. It’s reflective of a move towards a healthier lifestyle and work-life balance, which can nurture deeper, more enduring relationships.

What is the most important quality a borrower needs when approaching you for funding?

We look for honesty, integrity and a demonstrable medium- to long-term strategy. We don’t complete many one-off transactions. Our clients are usually property people with a specific and often niche property business. They may excel at creating value through planning gain or repositioning commercial assets. They may wish to restructure their portfolio or release equity for acquisitions. Our aim is to develop a deep understanding of their business and their objectives and from then on support those clients across all their property-funding needs, helping them to grow their business and increase their wealth.

What do you think will be the biggest challenges for the specialist finance market this year?

For lenders whose funding is provided by overseas entities, they may be exposed to the US-Sino trade war and the full consequences of this are, as yet, unknown. Domestic lenders will be keeping a very close eye on our political and economic landscape with the biggest and most pressing factor being the outcome of Brexit. Slowing output and growth, challenges faced by the high street retail sector and the potential for seismic change in Westminster under a left-wing Labour government are all contributing to a period of uncertainty not seen for many decades. UTB has ridden out many storms and continues to grow on a healthy trajectory. The bank’s leaders recognise that volatility and uncertainty can also bring opportunity and the structured finance team is given a wide remit to design and provide the solutions our customers need to seize them. We’ve established a strong track record in the sector. We’re into our fifth year of lending and have lent well in excess of £500m since the team was formed. We have a robust funding model and adapt our criteria to ensure we remain commercial.

Which areas of the specialist finance market do you believe are underserved and why?

Many lenders are quite rigid in their approach, trying to make customers fit their products rather than assessing their needs and adapting their solutions as they change over time. This approach often leads to the clients having to re-bank facilities to various different lenders rather than developing a flexible, enduring relationship with one which will support them and adapt as their requirements change through each phase of a project or as their business evolves.

In our experience, there are also a limited number of funding options for customers looking to operate in the serviced offices, student accommodation and specialist commercial sectors, possibly due to a skills, knowledge or experience gap at some lenders.

In the main, though, I’d say there is generally a decreased appetite for risk from many lenders. We have dealt with customers moving across to UTB from lenders where they’ve banked for many years having been refused support for their next project because the lender had changed its criteria. Many of these customers have had an outstanding track record and were in excellent financial shape. We’ve been able to fund projects for several such clients and they’ve remained UTB customers ever since.

What is the most complicated funding requirement you’ve had to create a solution for?

The majority of the cases we deal with are intricate; it’s pretty much why we were set up. We’ve dealt with some very complex cases in terms of the corporate structure of the borrower, the extent and diverse nature of their portfolio and the opportunity they wish to seize. Our case studies give good examples of the breadth of scenarios we’ve been able to fund.

How did you get into the industry?

By accident. A former partner was approached by a head hunter for a role she did not want — they ended up with me!

If you didn’t work in finance, what would you be doing?

Hmm, difficult one. There aren’t many roles which combine the many different aspects of finance, law, property, relationship management, salesmanship and creativity and that’s what makes it so demanding and interesting. If I had to do something else, it would have to be something totally different, like a professional sportsman perhaps. They need similar attributes — dedication, resilience, aggression, ambition, an ability to overcome obstacles and failures — and a desire to always push and strive for progress.

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