A new arms-length finance business backed by the William Pears Group is aiming to reintroduce traditional property lending to the UK market.
Capital A Finance, run by former Investec directors Daniel Austin and Jonathan Arnst, will lend between £1m and £50m on all types of property deals across the UK.
It will provide mezzanine finance and equity finance but with a focus on senior debt.
The business is seeking to achieve “appropriate risk-adjusted returns” across its loan book, said Austin, so that it has the flexibility to lend at varying rates.
He added that Capital A was willing to lend on short-term income and to take on development risk.
Since launching on 2 August, the group has built a £40m loan book and has a further £30m of funds committed. Austin said he hoped to increase that to £250m before the end of next year.
“Capital A has been established to lend across the entire real estate spectrum encompassing all asset classes, which we believe to be our competitive advantage,” said Austin. “The key is to provide seasoned property professionals with certainty, and hence the cost of finance has become less sensitive.”
He said that Capital A wanted to bring back the traditional property lending that banks such as Anglo Irish had provided, but without over-leveraging.
While the business will initially focus on the UK, Austin did not rule out a move into European lending.
“The current dearth of flexible property finance allows us to be UK focused and still achieve our target returns,” he said.
