Digital bank OakNorth and investment firm Fintex Capital have formed a strategic partnership in specialty finance, so far deploying together £20m.
The partnership will primarily focus on opportunities in the UK and addresses OakNorth’s ambition to expand into specialty finance with Fintex Capital as a specialist investor in this area.
“As we looked to expand our presence in this sector, partnering with Fintex was a natural choice,” said Mohith Sondhi, managing director of debt finance at OakNorth. “Lending together, with interests aligned, we aim to support high-quality businesses and lending firms backed by resilient assets, predictable cashflows and strong management teams,” he added.
Read more: ABF and specialty finance to lead private credit growth
The partnership is set to go beyond providing financing to lenders, also including opportunities in real estate credit, asset-backed finance, cashflow lending and “other complex or special situations where deep underwriting expertise and a willingness to look beyond conventional lending can unlock attractive risk-adjusted returns”, the firms said.
Over the last decade, Fintex has built a track record in SME lending, motor vehicle finance, buy-to-let mortgages, property bridging and consumer credit. It has deployed more than £400mn across the UK, Germany and the US.
Meanwhile, UK-based OakNorth’s core purpose is to address the funding gap facing lower mid-market businesses and supporting specialist lenders with loan-on-loan and structured finance facilities.
Read more: RE lender Module Five Capital secures $30m facility from OakNorth
Robert Stafler, founder and chief executive at Fintex, said the partnership will allow the firms to originate, underwrite and execute complex credit transactions across the specialty finance spectrum.
“We are actively pursuing opportunities to deploy typically c. £10 – 40m per borrower,” he added.
Read more: Fintex Capital appoints new head of business development
