Brexit fails to stunt LendInvest growth spurt

The company’s total annual lending increased by 84% to £320m in the year to March 2016, and it now employs 90 full-time staff, a 165% increase in headcount. The figures cover the period, during which, many in the market scrambled to complete deals ahead of the introduction of new Stamp Duty legislation in April.

LendInvest reported gross revenues up 133% to £32m and profits marginally higher than in the previous year – £3.4m compared with £3.3m, taking account of the investments made in technology and people during the period.

Despite the quieter period in the lead up to June’s vote on whether or not to remain in the EU, LendInvest said its upward trend has not been halted by Brexit, with incoming platform investment 50% higher and total lending volumes 29% higher than last year in the period since the vote. This is despite its decision to stop second charge lending and tighten LTV criteria in the immediate aftermath.

Gross revenue for the first four months of the new financial year (April-July 2016) was 59% higher than the same period last year, added LendInvest, though this is not broken down into pre and post-Brexit figures.

The funds managed on LendInvest’s online platform increased by 135% to £80m during the year to March. There has also been a 50% increase in investment flows into its Luxembourg-based flagship fund, which now manages close to £100m.

This is the third year of growth for the online business, since it was spun out of bridging finance lender Montello in 2013.

Christian Faes (pictured), co-founder and chief executive of LendInvest, said the company has “worked extremely hard to scale the business in a profitable, financially viable way”.

He added: “We may be growing fast, but we’re doing so sensibly. We have invested heavily in recruitment, technology development and underwriting expertise to keep our credit standards high and defaults low. Yet, despite the outlay of investment, we remain very well-capitalised with a balance sheet that’s well equipped for organic and opportunistic growth.”

Faes said the business is built on solid foundations and will be around for the long haul. “In light of the headwinds that the Brexit vote has caused for the UK’s economy, it’s been particularly rewarding to see customer demand for our products still growing and we look forward to building on this positive momentum in the next year.”

During the financial year to March the company secured additional institutional funding and now has four bank funding lines, including a £40m warehouse line from Macquarie. It also launched a dedicated development finance team.

Faes added: “In this lower for longer interest rate environment, the continued search for yield remains ever more prevalent among investors of all types and we are working hard to be able to supply better access points to a much sought after asset class.

“Likewise, short-term borrowers and small-scale property developers remain vitally underserved by traditional lenders, creating a substantial market opportunity for agile non-bank lenders like LendInvest.”

In June, LendInvest appointed Stephan Wilcke, the former executive chairman of OneSavings Bank, as a senior adviser to the business.

The company also launched a non-profit property development academy in September, in a bid to improve British property development skills.