JC Rathbone Associates and Laxfield Capital have joined forced to become the latest to set up a bespoke debt advisory business, as the brokerage loan market for UK and European commercial rest estate continues to see new entrants and increased competition.
JCRA Laxfield will advise borrowers on all aspects of commercial property finance in the UK and Europe to provide domestic and international investors, marrying Laxfield’s experience in debt sourcing, negotiation, execution and loan management with JCRA’s expertise in interest rate hedging, currency advise and risk management.
The partnership, led by John Edwards of JC Rathbone Associates and Emma Huepfl and Adam Slater of Laxfield, will additionally seek to overlay their combined expertise on debt strategy. The two firms will of course continue to run their existing businesses independently.
A raft of new entrants in debt brokerage have emerged in the last two years, led by Eastdil Secured as first mover, as the lending market continues to diversify almost as quickly as equity real estate capital flows.
Europe’s largest CMBS loan servicers, Hatfield Philips, Capita Asset Services and, most recently, Situs, have all hired in expertise to set up variations on the debt brokerage model, as has CBRE, with the notable capture of former Lloyds head of CRE non-core, Richard Dakin.
For loan servicers, debt brokerage is a needed diversification as revenues from CMBS loans dwindles as the net securitisation universe continues to dwindle. For agency firms, debt brokerage is the missing piece of their real estate service offering.
Arguably, as debt markets in Europe continue to diversify away from the core bank lending universe of the pre-crisis era, debt brokerage is increasingly a more sustainable business line than previously.
John Edwards, managing director of JC Rathbone Associates, said: “JCRA Laxfield adds Laxfield’s vast lending experience and highly respected transaction data to JC Rathbone Associates’ existing debt advisory business and strong expertise in risk management.
“The two companies have successfully worked together on transactions for many years, building reputations for high quality advice with emphasis on long-term relationships.”
Adam Slater, managing director of Laxfield Capital, added: “Globalisation of debt capital and the increase in the variety of lenders have made the real estate finance market more difficult for borrowers to navigate, increasing the need for bespoke financial advice.
“With its focus on relationships, JCRA Laxfield will take a long-term approach, encouraging clients to think of debt providers as partners to help them throughout their investment strategy, rather than a one-off commodity product.”
JC Rathbone Associates advises on deals with a traded derivative value of £20bn annually and Laxfield’s principals have arranged deals with a value of more than £9bn to date.