When you are launching a business, you often ask yourself searching questions about the journey you will undertake. Tenn Capital is no different in this regard and has spent a long time thinking about the merits of launching the business right now. But, of course, there are many reasons why we shouldn’t launch a bridging lender at this moment in time. We are still in a pandemic, Brexit, many competitors, unnatural economic conditions, global tax upheaval and the list goes on. This analysis, however, also unearths what the core part of Tenn Capital will be built around. Our ‘moat of security, as someone once said.
Whilst there is large scale monetary and fiscal intervention, we believe the prevailing Economic Conditions are extremely favourable and will remain so for sometime. Interest rates are low and likely aren’t going to move dramatically for some time yet. Money printing around the world, including the UK, has been astronomical. Whether or not you believe this to be transitory or permanent, this pressure will drive above average inflation, supporting asset prices. After 18 months of global lockdowns, I believe central banks and governments worldwide will demand a powerful economic recovery and do all they can to support this.
Low interest rates have other knock-on effects. Bond yields have collapsed worldwide and, in many cases, are paying a negative real return. This poses a significant challenge for asset managers, pension funds, endowments and other custodians of capital. The target for many of these money managers is to beat inflation by a reasonable margin after considering all appropriate costs. With an estimated $119 trillion in traditional fixed income markets, with a large portion earning less than inflationary return, deploying capital at scale is a real challenge. The Availability of Capital looking for yield enhancement is significant.
Once we have decided that the environment exists for a business like ours to work in, we had to analyse the market to see if we could offer something genuinely valuable. Of course, we will hope to deliver a great service and user experience to our clients, but this should go without saying. This isn’t a ‘USP’. When we looked at the market, it became abundantly clear that the UK bridging market is wonderfully served, with some fantastic businesses we admire. That said, we truly believe that there is a Gap in the Market for a short term lender, who can lend internationally, traverse structures, is comfortable operating in complex situations and in tight timeframes. We are comfortable under these conditions.
Our team is our greatest asset. We have built a World Class Team with decades of experience in the financial services markets. Our collective experience spans credit, risk, tax, investments, lending, property, compliance, administration, structuring, broking and banking. Our credit work is at the centre of what we do. We are not a technology business. We buy in technology, and we do not build our own. Instead, we are laser focus on the credit process within our business. We have a mature and well defined process running through the centre of Tenn Capital, and whichever way we fund a deal, the credit process remains the same.
Once you add those four things together, we believe now is the perfect time to launch Tenn Capital.