Leasing Life caught up with D&D’s Bill Dost to find out more about the Canadian lessor’s plans for expansion – both in Europe and closer to home – following its latest wholesale funding deal with Wesleyan Bank.
D&D is not your conventional lessor. The firm’s growth journey – opened in Canada in 2000, expanded to the UK in 2009, and now about to enter the US – demonstrates that you do not necessarily need billion-euro revenues and a thousand-strong branch network to diversify your geographical footprint.
In August, the business obtained a £20m (€22.5m) wholesale funding facility from Wesleyan Bank – the newly rebranded Syscap – gearing up for business among UK SMEs. “We have known them, as Syscap, for many, many years,” says D&D founder and president Bill Dost.
“In fact, at one point Syscap used to send us business, before they were purchased by Wesleyan [in 2015]. It’s something very funny – it’s come full circle.” A common acquaintance helped put the deal in place: Tim Canham, head of sales at D&D, has a stint as sales director at Syscap under his belt. “He was instrumental in helping us to get the deal finalised,” says Dost.
“We had an existing relationship with Syscap predating Tim, certainly, but he helped all of us put the whole thing together. [Wesleyan] knew him well, so that certainly went a long way.”
Dost mentions that D&D Leasing UK has another two wholesale funding deals in the pipeline, and hopes to publicly announce at least one before the year-end. The business plans to have vehicle finance and commercial loan lines by 2019, replicating in the UK the asset range it already finances in Canada. D&D is just as active on the other side of the pond: it is close to opening up shop in the US, adding to its North American footprint.
“Our US proposition is almost ready to go, and we’ll take it from there,” says Dost. “We’ve been working pretty diligently on opening our US business for at least a year now, just to bring the right equity and debt in place. All things being equal, we’re hoping for a fourth-quarter 2018, or maybe a firstquarter 2019 opening.”
As with many other extra-EU financial services businesses, D&D originally set up its UK base, in 2009, with an eye to mainland Europe. It is still looking to make a foray on the continent – although Brexit obviously commands caution.
“We were looking at Poland at one point,” explains Dost. “We put that on hold until we finalise and finish our US opening. We really want to see what is happening with Brexit, just like everybody else.”
Regardless of what comes out of the UKEU deal, especially regarding passporting rights for financial services – Hitachi Capital has already set up a subsidiary in Amsterdam to give it a solid mainland foothold come March 2019 – D&D is not interested in entering the high-competition, near-saturated markets of the biggest economies.
“We are not interested in Western Europe so much,” says Dost. “We want to avoid the Mediterranean [countries], the established markets, because we are a bit of a lowermarket player. For us it’s better to sit with what I would almost say are emerging markets.
“Now, Poland is not really emerging anymore, but it is very successful and has had growth pretty much year-on-year. It has done a great job of building the marketplace, so we like Poland as a lookout.”
Despite ambitious – but staid – growth plans, Dost does not see a recruitment drive anytime soon. “We just went through a pretty large recruitment process in the UK. That does not mean long-term we’re not [hiring]; I will just say that right now we’re probably fine. There will be new recruitment as we bring on specific products.”
So, what next?
“We’re looking at some exciting growth next year – as we do every year.” Dost replies. “We have grown yearon-year, so now it’s a matter of how we take it to the next level. For us, that really means ensuring that we have adequate facilities in place – one of them being the Welseyan line, another being the one we are trying to put into place. The other is the need for diversification.”