Traditionally, the term ‘private client’ would conjure up images of boutique banks, wood panelled board rooms and ‘old money’ families being looked after by discreet advisers. However, I think that the market has moved on and, for me, the term now really encompasses the need for larger, more complex transactions to be handled in a different way to the mainstream market, be it for individual or corporate clients.
The need for this tailored approach becomes even more important during times of economic change and though we have avoided the ‘cliff drop’ scenario post-Brexit, there are still going to be challenges ahead on top of the stamp duty and tax changes that will be feeding through the property sector.
There is also an ongoing evolution within the lending market as banks change their credit criteria and new banks and lenders come to the market trying to carve out their own particular niche. I think that the shake-up post-Brexit will lead to some lenders taking a more conservative view, allowing competitors to move into the vacuum. This means that a well informed and well connected intermediary will be even more key in achieving the best possible outcomes for their clients.
In the ‘private client’ world, the deal sizes can preclude some of the standard lenders from offering the optimum lending solution, or it may be that the complexity of the underlying transaction is just too far out of their normal scope. Even more likely is that the borrowing entity structure runs across different vehicles and jurisdictions causing issues for mainstream lenders.
Source of wealth, income streams and tax positions are all crucial questions for lenders in today’s market, but for HNWs and corporates, it is likely that assets and income are dispersed around the world, and finding a lender that understands the global position is crucial. Therefore, advising HNW individuals and businesses requires a specialist skillset and a holistic approach as they need bespoke solutions and specialist knowledge to deal with larger and more complex real estate and property transactions.
In light of this, Brightstar recently launched Sirius Private Clients, a new division that is in keeping with Brighstar’s DNA, as it is building on its strategy of having specialised teams and consultants in all areas. In an increasingly competitive and crowded marketplace, it is vital that intermediaries can find an appropriate solution for their clients in whatever sector. Therefore, we want to disturb the status quo and bring our market knowledge and experience to the HNW sector and, by working with our key staff members, Sirius will help intermediaries write and win more private client real estate funding business.
Robert Collins is Brightstar’s director of commercial and development finance and director of Sirius