IN THE SPOTLIGHT WITH STEPHEN PALFREEMAN, TUSCAN CAPITAL - FINANCIAL REPORTER
27.06.23
In the Spotlight with Stephen Palfreeman, Tuscan Capital.
We spoke to Stephen Palfreeman, senior associate at Tuscan Capital, about his recent sabbatical, what advice he would give to new starters entering the market, and the ASTL and FIBA's new Certified Practitioner in Specialist Property Finance (CPSP) programme.
FR: You’ve recently taken a sabbatical. Where did you go and why did you do it?
Having worked in the financial services industry for 10 years, it's easy to get caught up in the never-ending cycle of responsibilities and obligations, so I thought this was as good a time as any to do it. The decision was not an easy one, but I’ve always wanted to travel for an extended period so I felt if I didn’t do it now, the opportunity might not be available further down the line.
Our route was mostly decided by visiting friends and family along the way, as I’ve always found I have my best times abroad where I know a person on the ground. We travelled down the east coast of Mexico, Caye Caulker, Mexico City, the west coast of the USA, Fiji, Australia, Bali and Vietnam. I went with my girlfriend, who became my fiancé out there as I thought a Bali sunset gave me a good chance of her saying yes. Having said that, carrying the ring in my bag for 55 days was character-building and not good for my anxiety levels.
Since I’ve been back people have asked me where my favourite places were so here are my top three:
• Caye Caulker (Belize) - A nightmare to get to but the best snorkelling trip I’ve ever done.
• Hoi An (Vietnam) – An amazing place with a beautiful old town, cheap food, very friendly people and I was able to get a suspect, tightly-fitted suit made.
• Gili Trawangan (Bali) – A stunning island with great food, especially for proposal setting.
So, without wanting to sound like one of those annoying guys who has just done their gap year, what did I learn while I was away? It was an amazing time to switch off from work, which doesn’t really happen that easily and it allowed me to do things I wouldn’t ordinarily have the time to do. I was able to do a skydive, swim with sharks (well, nurse sharks), take cooking classes in Bali (much needed) and listen to hundreds of different podcasts.
I feel very lucky to have had the opportunity to do this and would recommend a sabbatical to anyone who is able to. Now I am back, I feel energised and refreshed to play my part in propelling Tuscan Capital forwards.
FR: What’s your background and what is your role at Tuscan Capital?
My first role in real estate finance was at Omni Capital, which was one of the leading providers of bridging and short-term funding in the prime London market. They were the financial services funding arm of CPC Group. Coming straight out of university and having my interview in Candy HQ with Colin Sanders in Knightsbridge was an amazing experience. Omni Capital gave me my training base in fast-paced, high-end bridging, providing loans from £500,000 to £125m.
One of the things I really enjoyed the most from that experience was being part of a small team. It made me not only accountable but also able to take on a lot of responsibility early on. Another part I enjoyed (which was also due to the size of the company) was we were able to make decisions quickly - especially credit decisions due to a direct funding source. This was a key selling point I believe introducers really appreciated.
Omni Capital rebranded to Fortwell Capital which then focused on high leverage, development-led funding from £10m-plus. This gave me a great background in high-value development opportunities where there is a lot more to consider when funding ground-up projects. I learned first-hand the level of detail required and financial modelling needed to underwrite and execute these types of transactions. It was also educational to see Fortwell operate under two different parent companies in CPC Group and latterly, Cain International.
I joined Tuscan Capital in 2019, rejoining Colin and Ed Parsons along with some of the team that were at Omni Capital. In my role I’ve been responsible for originating and executing bridging loans as well as overseeing the operational and marketing aspects of the business.
FR: The bridging market is a crowded space, what makes Tuscan stand out from competitors and what are their strengths?
It is hard sometimes to differentiate within the bridging space. I’m sure some brokerages are sick of BDMs coming into their offices offering very similar products; however I think there are genuinely a few things that make us stand out and that we do very well.
Our strength is our size. We are a small team but that means decisions - especially credit-backed decisions - are able to be made very quickly. We work very closely with each other so can easily discuss new deals and find a way to structure them. Ultimately, if a deal is completely vanilla it’s not likely to come to us.
The launch of our Fast Track offering last year was a game changer for our clients. It has meant when we say we are quick to deal with, we can really demonstrate this. The ability to use AVMs and desktop valuations, as well as using title insurance and search indemnity on certain deals, has allowed us to reduce turnaround times massively. I genuinely believe our ability to be solution-led, to make a deal work and then getting terms agreed and professionals instructed, is market-leading.
FR: What advice would you give to new starters entering the market?
Having a good attitude and a willingness to learn are really important while working closely with a mentor is also key. We are about to launch a Tuscan Talks initiative on social media which speaks to industry professionals who have reached senior positions at a relatively young age. Hopefully, it should provide nuggets of advice to new starters coming into the industry.
FR: The ASTL and FIBA are launching the Certified Practitioner in Specialist Property Finance (CPSP) programme. What effect do you think this will have, and do you expect much demand for it?
I can definitely see demand for it. It’s certainly something I would have appreciated coming into the market. The bridging space is fairly niche, so any extra information assisting new starters would be beneficial and should also help raise standards across the industry. I understand it has been years in the making for the industry so it’s important it has the uptake to carry on. We will be encouraging our team to take part in it and hopefully, it will be a valuable training aid.
FR: What do you think the main challenges are facing the industry?
The rising costs of funds and the ever-changing economic landscape. It will be important for borrowers to choose experienced lenders whose teams have been through different cycles. Competition is certainly a challenge. The industry is awash with huge amounts of capital to deploy and only a finite amount of borrowers needs those funds. New entrants are regularly entering, offering similar products in the bridging space and as a consequence it’s becoming incredibly difficult to differentiate. We know there won’t be enough deals to go around for everyone, so it will be important to stick to our key values of excellent service and deliverability.
Read the full interview on Financial Reporter - In the Spotlight.
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