Aaron Cummings, Portfolio Manager at LendInvest, a leading UK based Fintech firm focused on the property finance sector, recently commented on his role, which is to deliver on development loans. Cummings also offered insights regarding what good portfolio management is all about.
Cummings, who reportedly joined LendInvest back in June 2017, revealed that he’d previously been working at Vanquis Bank, a subsidiary of the Provident Financial Group that now provides “credit building” credit cards under the VISA brand for the UK.
While sharing why he decided to change roles since joining, he said he’s been “fortunate enough to work across several areas within the lending side of the business.” He pointed out that, at first, he had joined the Loan Servicing team. He also spent about a year working within the Bridging Finance team before taking up an Associate role within the Development Finance team back in February 2019. Cummings says he’s been in his current position as a Portfolio Manager within the Development Finance team for the last 18 months.
While explaining what his role involves, Cummings noted that he’s been working through the full lifecycle of LendInvest’s development loans. He explained that this process includes working alongside the Relationship Manager, “assisting with appraising and analyzing new opportunities to prepare for credit review, undertaking initial due diligence, instructing professionals and reviewing their respective reports.” This includes “working through the legals up to completion of the transaction,” Cummings added.
In response to a question about how he has found reacting to the challenges of the past year, he said:
“I think I can speak on behalf of most people and say that the past 12 months have been difficult, especially the first 3-4 months from March 2020; when we were put into the first lockdown. It appeared that the world was falling over, which created a real challenge for the team and the wider business. We focused heavily on our loan portfolio during this period, as we wanted to take care of our existing developers to work with them and provide the support they needed during this unprecedented challenging time.”
After they have completed a new facility, Cummings explained he is the point of contact “throughout the term of the loan.” This means “monitoring the build process, executing monthly drawdowns, making facility amendments and delivering any day-to-day assistance our borrowers require,” he added.
This along with the initial slow downs – and in some cases even complete shutdowns – of development sites across the UK have been a challenge, Cumming noted. Although things looked quite bleak at that time, he says we can look back now and be proud of how we all worked cooperatively from home to manage the situation in an effective manner and “come out of the other side unscathed,” he claims.
“There are many parts of the business, from Funds Management and Treasury, Credit Risk, and our Development Finance team that work together in a normal environment, but the past 12 months have magnified this. We’ve all learnt on a more granular basis what each other’s roles entail, and on reflection, this has been a real positive to come out of an otherwise pretty dire year.”
While commenting on improvements he may have seen in how he’s been able to achieve his goals, Cummings remarked:
“I think it’s the norm to improve in your role as time goes by and you gain more experience in your area of work. The past 10 months or so have seen times of working under prolonged periods of pressure, which you probably wouldn’t see outside of a global crisis. There are only so many hours in a day and so many days in a week, so it’s really important to work with pragmatism and be as efficient as possible. We’ve certainly adapted to this, and along the way we have frequently drilled down on improvements to our processes and procedures to make things as streamlined as possible.”
“It’s important to take stock and continuously look at ways in which we can improve our offering and service to our customers, and we’ve managed to get a lot out of this over the last 10-12 months.”
Responding to a question about what “good portfolio management look like,” Cummings said that the basis or foundation of effective portfolio management in development finance begins with forming strategic relationships with your clients to gain a better understanding of how they work, and then “keeping that communication open throughout the build.” While developments can be somewhat similar, “ultimately they are unique to themselves, so this detailed understanding and open line of communication is really important,” Cummings said.
“From an operational perspective you have to be proactive rather than reactive. A development finance loan is very active and hands on. For example, throughout the build process at times you may see delays in some cases, and at other times, our borrowers may see opportunities to enhance their scheme’s planning permission.”
As reported recently, LendInvest has made some changes to its Buy-to-Let (BTL) suite, including rate reductions, the introduction of higher LTV products; and an increase in maximum loan sizes. LendInvest reported that it has reduced rates across its standard BTL range, with its 80% LTV product now available at 3.89%. The platform also reduced rates and introduced a new 80% LTV product for small HMOs, while increasing the maximum loan size for small HMOs to £1 million.
(Note: for details on other changes related to this announcement, check here.)
The latest changes in LendInvest’s BTL suite came shortly after the Fintech received a commitment from global banking giant JP Morgan. According to LendInvest, JPM has committed £500 million for future loan originations through LendInvest. This investment follows the sale of a £125 million mortgage portfolio to JP Morgan in September 2020. JP Morgan notably joins a roster of institutional investors working with LendInvest, including HSBC, Citigroup, and the National Australia Bank.