Silbury Finance — which is backed by funds managed by Oaktree Capital Management — will provide bespoke senior development finance solutions for property professionals active in the UK residential, retirement and student accommodation sectors.
The lender is targeting up to £3bn of lending over the next six years.
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The platform will underwrite loans typically in the £10m-150m range with LTVs between 60 and 70%.
Silbury represents the latest Oaktree platform created to seek to take advantage of a dislocation of traditional financing sources to create a market leader in an attractive market segment.
Gavin Eustace, founding partner of Silbury Finance, said: “The UK residential sector, which was already benefitting from a number of favourable structural trends, has further demonstrated its defensive and countercyclical characteristics during the pandemic.
“Against a structural backdrop of undersupply of residential real estate in our target markets, the case for debt financing remains strong and we look forward to closing on our near-term pipeline of opportunities, employing a prudent and disciplined approach to lending.”
Matthew and Gavin have over 40 years combined of real estate lending experience, having originated over £3bn of real estate loans across the debt stack and a range of use classes.
Gavin was previously head of residential development at Octopus Real Estate, where he was responsible for over £1bn of lending.
Prior to launching Silbury, Matthew spent six years as head of European real estate debt at Man Group, before joining Oaktree as a senior adviser.
Matthew Pritchard, founding partner of Silbury Finance, added: “Middle-market residential developers continue to be hugely underserved by the lending markets, and we expect the current uncertainty to only exacerbate this trend further.
“Swathes of UK lenders, comprising both the high street banks and alternative lenders, have retrenched due to uncertainty generated by the Covid-19 pandemic and are committed to managing their current loan books,” he claimed.
“Large debt funds continue to seek the higher returns available from the large, single-ticket loans.
“We believe that the Silbury proposition, marrying an institutional-sized balance sheet and practices with a strong client-led approach, will appeal to borrowers for whom bespoke solutions and certainty of funding remain the key factor when choosing a lender.
“With the backing of Oaktree, a deeply experienced global real estate investor with a track record of entering structurally supported yet dislocated markets to create market leading products, we believe that we are ideally positioned to be the preferred long-term capital partner to a range of borrowers.”
Pablo Velez, managing director at Oaktree, commented: “Matthew and Gavin are ideal partners to create Silbury in order to provide experienced residential developers with bespoke capital solutions to help address the UK’s chronic undersupply of modern homes.
“We view the challenging economic backdrop as a compelling entry point to the sector and plan to take full advantage of the lack of a legacy book to focus on expanding quickly.
“UK real estate, in particular senior secured lending collateralized by residential developments, offers an attractive combination of risk and returns, and we expect this to continue for the foreseeable future.
Oaktree has partnered with experienced management teams to create over 30 platforms across 11 countries in the last decade.
“Working with Matthew and Gavin, two highly experienced financiers, we look forward to adapting and implementing our platform playbook to make Silbury a leader in its target markets,” Pablo added.