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The co-founder of one of the United Kingdom’s biggest nonbank mortgage lenders, LendInvest, is launching a new U.S.-based investment firm that will back direct lenders that cater to U.S. residential real estate investors.
LendInvest co-founder and chairman Christian Faes says his Los Angeles-based Faes & Co. will build and invest in technology-enabled direct lending businesses. The first priority will be to build out F2 Finance, which provides short-term bridge loans to U.S. property investors who buy, refurbish and flip homes.
Faes & Co. also plans to launch an income fund in the third quarter that will invest in the proprietary loans originated by F2 and other businesses that the firm incubates and scales.
“The vast majority of financial services remains dominated by deeply entrenched incumbents that are burdened by legacy technology, people and processes,” Faes said in a statement. “The new breed of entrepreneurs building finance companies today are using technology and a modern approach, to provide customers with a far superior offering. I think this is in the early days of where this will go, and we want to build a firm that is an expert in building these businesses, backing great founders, and providing investors with superior risk-adjusted returns from this transformation.”
Faes, an Australian real estate lawyer who went on to co-found LendInvest in the aftermath of the 2008 financial crisis, remains a shareholder and non-executive chairman at the company, which claims to have £3.7 billion in funds under management.
Last week PacWest Bancorp, one of several regional lenders caught up in the banking industry turmoil created by the failures of Silicon Valley Bank, Signature Bank and First Republic, announced that it was selling a subsidiary that provides loans to residential real estate investors in 30 states, Civic Financial Services (CIVIC), to Roc360.
Roc360 said CIVIC will join the company’s growing portfolio of real estate brands, which include Finance of America Commercial, ElmSure, Wimba Title and Tamarisk Appraisals. Roc360 said its existing affiliates and CIVIC collectively funded more than $7.6 billion in business-purpose loans last year.
“In the face of market difficulties, we continue to expand and develop more products and services for real estate investors, Roc360 CEO Arvind Raghunathan said in a statement. “We believe that America’s housing stock is severely undersupplied, with more than 50 percent of homes in deferred maintenance, lacking the modern-day energy efficiencies that our clients install with each loan they take from us. We will continue to prudently expand and invest for long-term solutions to these structural problems.”
PacWest Bancorp, the parent company of Denver, Colorado-based Pacific Western Bank, said CIVIC’s previously originated loans and loan servicing operations were not part of the deal.
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