Property finance specialist MSP Capital has agreed a £100 million development funding facility with a single investment partner.
The fixed-rate lender has confirmed the senior-secured facility with London-based asset manager and private equity firm Pollen Street Capital. It is designed to strengthen the south coast-based lender’s ability to reach projected growth targets in the development finance market.
The deal is the latest of several strategic moves MSP Capital has made in the past year to ready itself for more growth including the expansion of several directors’ roles and the introduction of new associate directors.
Becky Harris, Director of Strategic Finance and Operations at MSP Capital, said: “This facility is all about providing more flexibility and diversity of funding for us and our clients.
“It comes at a time when we are seeing more and more developers approach us for development finance.
“From the get go, the people at Pollen Street were so engaged with not only our business and lending strategy, but who we are as a team and company. We look forward to a long and successful partnership with Pollen Street.”
Adam Tovey, MSP Capital’s Director of Risk and Underwriting, said: “This is a pivotal time for specialist lenders such as us.
“More borrowers are seeking alternative sources of development and bridging finance amid a steady retreat from mainstream, high-street lending due to challenges in sections of the property market, especially buy-to-let.
“As a long-established fixed-rate lender backed by institutional investors and other investment partners, we offer certainty and confidence at a time when base rates have been increasing.
“It’s fantastic that we have been able to secure up to £100 million in funding from Pollen Street Capital.
“This will further solidify our certainty of lending and ability to empower clients to continue building homes in England and Wales.”
Founded in 2013, Pollen Street is an independent, alternative investment management company headquartered in London, and with offices in the US.
It invests in credit and private equity strategies focused on the real estate, financial and business services sectors.
Michael Katramados, Partner at Pollen Street, said: “MSP Capital has a fantastic track record, with over 40 years’ experience in property finance and deep knowledge of their local markets, representing a great fit for our senior secured credit strategy.
“Pollen Street has extensive experience in funding bridging and development lenders, helping them to support developers across the UK. I’m delighted that we can help to deliver more funding to be used for the construction of energy efficient, affordable homes around the country through this new partnership with MSP Capital.”
The transaction between the two companies was supported by the EY FS Corporate Finance team who were appointed as sole financial adviser for MSP Capital.
Becky Harris added: “The team at EY have been integral in the completion of this deal and we would like to thank Stuart Mogg, Partner at EY and Olivia Dunning, Executive at EY for their expertise throughout the process.”
Travers Smith acted as legal counsel to MSP Capital, with Ashurst acting for Pollen Street.
MSP Capital is a principal bridging and development lender based in Poole, Dorset, offering funding solutions to property professionals of up to £20 million.
It has reported a 30% increase in its loan book this year as well as a 41% increase in head count to ensure the team maintain their focus on relationship-led lending to clients.