UK marketplace Wellesley is currently pitching to raise 1.5M GBP in a convertible from the crowd.
Interview with Graham Wellesley, CEO, Wellesley
What is Wellesley about?
Wellesley is a lending business. It provides an alternative for borrowers than traditional high street lenders. Our business allows us to meet the needs of two key underserved markets:
- experienced mid-sized property developers who are building homes in the UK
- investors seeking higher returns that can be achieved in deposit accounts who are willing to take a level of additional risk through a range of different products.
What are the three main advantages for lenders?
- Lenders can achieve higher risk adjusted returns than are available in traditional deposit accounts
- Property development lending is asset backed
- Funding is being put to good use, helping to build homes in the UK
What are the three main advantages for borrowers?
- They are dealing with a lending firm who specialises in property development
- We are committed to very high levels of service and quick decisions
- Each individual borrower is important to us
Wellesley is quite established in the UK marketplace lending sector. Why do your raise capital via Seedrs through a convertible now?
We want to raise more capital to enable us to invest in acquiring new customers and developing our technology. All of our external funding is retail rather than institutional. Raising further equity through a retail route will help us to build a business where strong alignment of interests between investors and shareholders will build a stronger company for the long term.
To which extend (if any) are equity investors covering capital losses on loans to p2p lenders vs the mini bond holders?
- So far the board has chosen that the company (shareholders / equity investors) will cover the losses incurred by all other investors. This is at the boardâ€™s discretion and investors are all aware that they are taking risk in relation to property development lending. Investors continue to carry the risk of losses on both P2P and mini-bonds.
- Wellesley aims to use the funding to expand its business, its marketing, human resources and IT development.
Wellesley originated about 80M pound YTD. Did you experience any effect of Brexit and what is your outlook for 2017? How do you see the opportunity of the IFISA market?
- In the run-up to the referendum and in its immediate aftermath property development across â€œmiddle Britainâ€ took somewhat of a pause. There are signs now that growth is returning to the market and the outlook for 2017 is positive as the key driver â€“ the demand for more housing â€“ shows no sign of reducing.
- We continue to develop a product that meets the technical requirements of the IFISA market and will provide an update as soon as there is more to say.
- We specialise in multi-unit developments, our average unit size is less than Â£500k. As a result we believe that we are well-placed to face any challenges that the UK residential housing market may face post-Brexit.
Are there any plans for international expansion?
At this stage, quite the opposite. We had started doing some lending in Majorca, Spain and decided back in the first half of 2015 that we would be better able to serve our customers through the economic cycle if we focused on our core expertise and competency in the UK market. Continue reading