Brokers: Round-up1 May 2010 by Fred Crawley
The surge of activity seen in the first quarter of 2010 among the UK’s more active brokers seems to be spreading, as more introducers than not become active in recruitment, product development and – most important of all – securing new funders.
As seen on the opposite page, Kennet Leasing is returning to its full strength, while other larger players such as Tower Leasing – like Kennet, a sales-aid specialist – is in hiring mode.
Some are going so far as to start new regional offices – a strategy not seen in the introducer market for some time.
In the motor sector, DSG Financial Services has just set up shop in Scotland, while asset finance intermediary Premier Leasing & Finance (PLF) has just hired ex-One World Leasing sales director Tim Jones to run its new Manchester office.
While on the subject of PLF, it is worth mentioning that the company has also just signed the biggest deal in its 18-year history.
The agreement, involving a £1.6m (€1.9m) software operating platform for a large police authority, was underwritten and structured via the middle ticket division of ING Lease UK.
According to managing director Greg Jones, PLF’s new sales director is already looking at more such deals.
Some funder names keep cropping up again and again, too.
General Asset Management is known to be more active in the sector, while Canadian entrant D&D Leasing has reputedly acquired more funds for broker business after running out after an explosion of interest in mid-2009.
Meanwhile, Henry Hemsley, who previously worked for Hitachi Capital’s broker division, has been working with funder Assured Asset Finance on a consultation basis, suggesting Assured may be looking to build its broker business soon.
Hemsley, meanwhile, is understood to be pursuing a new project of his own.
Elsewhere in the funding environment, things are not so clear – after a promising start in hiring Richard Briscoe, the name formerly behind Weatherbys and Broadcastle, the Close Group has become a lot quieter about its rumoured formation of a new broker-led subsidiary.
Taking a step back from asset finance, it seems that many lease brokers are exploring the wider world of commercial finance.
The ever-entrepreneurial Robert Keep has launched his brokerage, Norton Folgate, into the much broader field of “asset-based lending”, and several factoring brokers are talking about taking business on from lease brokers (see A new dawn of co-operation).
For more evidence of the increasing prominence of leasing in the commercial finance universe, just look at broker association the National Association of Commercial Finance Brokers (NACFB), which remains as keen as ever to boost its leasing and asset finance credentials.
The NACFB’s big project at the moment is its inaugural Commercial Finance Expo, to take place in Birmingham’s National Exhibition Centre on 30 June.
This will be the UK’s first event dedicated to commercial finance intermediaries and their funders, and promises more brokers under one roof than have been seen since the start of the recession.
Yet, while this column has relentlessly pursued news of growth and optimism in recent months, there will doubtless still be brokerages that come to an end in 2010, a year in which many introducers are still subsisting on secondary rentals.
With little fresh blood coming into the junior end of the market, and many veterans reaching retirement age, it seems a lot of long-tended customer contact books may be scattered to the winds over the next year or two as their builders drift out of the trade.
Not if someone can work out a way to buy and sell them, says Richard Hall, of asset and motor finance broker Herts Business Solutions.
Hall wonders if there is a way for brokers to pick up access to the phoned-in deal streams of retirees.
Presuming that such deals could be done, there is always the matter of who picks up the phone to ensuing business – a factor that might put these potential gold mines out of reach for funders looking to build their sales volumes through contact acquisition.
“Our customers range between 30 and 70 in age, with an average in the 50s, and they want to deal with people in the same range,” Hall says. “They do not want to talk to a fresh hire working at a sales desk, and they will not want to be cross-sold on other product lines.”
In short, it seems like the factor that ensures the value of contact books is the sense of trust that callers have in brokers “not to overpromise, and not to under-deliver”, as Hall puts it.
As such, a bigger problem than finding a way to sell such a commodity is finding a buyer with the right mentality to make it worth something.