How long have you been working within the asset finance and leasing industry?
I have more than 20 years’ experience within the leasing and asset finance industry; my previous role was at Investec, where I was head of asset management of the company’s asset finance division. I held that role for seven years and I was responsible for the company’s operating lease book. I joined from CitiCapital as part of an acquisition of its asset finance team. Prior to CitiCapital I was working in the contract hire and leasing industry with GE Capital, through its Avis Fleet services subsidiary.
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What were the reasons behind your decision to launch your own consultancy?
I felt it was the right time, as the economy is now in a much stronger position. Within the asset finance, leasing, automotive and transportation sectors there’s a lot of activity and growth. We are starting to see some mergers and acquisitions across these sectors and new product development. There’s a shortage of experience in these sectors, as many experienced industry professionals left throughout the recession and have not returned. I felt that it was the right time in my career to try and build a sustainable business to support these four sectors.
I’ve also set up a community programme to support students who many not have the opportunity to go on to university. I provide them with some mentoring in terms of job opportunities in the market. I think it’s important as some young people don’t want to go to university and there has not been substantial growth in apprenticeships.
How have the first couple of months been?
I have just completed my first mandate. I have also been in conversation with a dozen firms, so there’s a possibility of business coming up in the short term. I’ve been discussing with a couple of extremely experienced individuals the potential of them joining the company as associate consultants.
What types of consulting are you offering to your clients?
I offer advice on all aspects of technical asset management, like portfolio evaluation and residual values. I’m also aiming at consulting clients on strategy, helping them with asset risk policies, corporate governance, as well as product and service development. I am planning to provide assistance with acquisitions, disposals and vendor relationship management.
Once you get engaged with a client for a commission, would you work in-house for them or from your office?
It can be both, it depends on what the client wants and the type of work which is entailed. For a recent project, I have spent time working at the client’s offices, but I performed the field work at my own office. It is a question of flexibility at the end of the day in order to meet the client’s needs and get the job done.
Would you consider targeting a particular type of leasing client?
At the moment I am targeting various types of companies, as I want to cast the net wide. In terms of the asset finance and leasing sector, I am targeting asset finance lenders, banks, brokers, private equity firms and new entrants.
What are the big challenges for consultant to advise on in the market?
Regulatory, I think is the biggest one. I am talking to people at the moment about corporate governance around asset risk and other issues. The new regulations around the FCA have caused a lot of banks and asset lenders to really think about what they’re doing, and clearly the credit risk is a very important part of what the asset finance businesse are hinged around. But quite often there’s not as much focus given to the asset risk which underpin those credits.
One of the things that came out of the financial crisis was that it got to the stage where banks didn’t know what they had got on their books that were underpinning the loans they were taking the risks on. In many cases it’s hard assets that are underpinning the loans and if the companies aren’t in a position to be able to manage those risk aspects effectively then they will find themselves in hot water. I think the new FCA regulation and Basel are looking at causing the asset finance businesses and the banks to really look at what is underpinning the loans, and where they are taking the risk, trying to get a deeper understanding in terms of the risks that are involved with the business they are writing. That is the biggest challenge.
Is regulation going to be a driver on the consolidation of the broker market?
Absolutely yes. I think it would have the similar effect of what the recession had in the wholesale market. The FCA regulations are going to do the same potentially in the broker market. I think it will sort out the strong from the not-so-strong. The bigger ones will survive, particularly the ones that have got strong ties with a banking partner so, for example, Mann Island with Investec. But I think it would be the smaller ones, the one or two main players that are really going to struggle. I think it will cause some to decide ‘you know what, there’s too much administration and regulation around this’ and walk away from it.
