2016 was clearly a year of continuing acquisitions, kicking off straightaway in January, and apart from a Brexit pause for breath, continuing right the way through till December, with the acquisition of Renaissance Asset Finance by Arbuthnot Latham, announced at Christmas.
At the start of 2016 the economic backdrop was bad, oil was rockbottom and those whose income depended on it were groaning. Yet the asset finance industry seemed unphased, lawyer Joanne Davis had courageously left DWF to head up her own new operation at Locke Lord UK LLP, after which her colleagues at DWF seemed to disperse to other law firms too, including Roger Potgieter joining Shoosmiths. Star Capital acquired First Capital Finance to its portfolio of three other brokers, Kennet, Ignition and AH., Hitachi Capital generously offered flooded Somerset farmers interest relief through a Rural Emergency Fund, and Highbridge acquired CIT Vendor Finance UK, renaming it PEAC.
February 2016 saw Paragon Bank reporting on its integration of the Five Arrows acquisition, rumours were that DLL was for sale (could anybody afford it?), Close Brothers Asset Finance bought Finance for Industry, with the aim of integrating it into its industrial equipment financing division, and Asset Alliance Group bought Forest Asset Finance Ltd. Clearly the acquisition trend was continuing, and it wasn’t about to stop!
In March 2016 we celebrated Investec Asset Finance’s 10th birthday, and we reported that BLME was agreeing to acquire Renaissance Asset Finance, and many a senior leasing establishment stalwart was beginning to kick themselves that they hadn’t left their banks years ago, forsaking all the corporate trappings, and opened up their own asset finance brokerage. Leasing education is always a hot topic, and there was amazing news of the creation of a Masters degree in Leasing and Asset Finance at Falmouth University, masterminded by the Leasing Foundation’s Peter Thomas.
April 2016 saw ex Lombard chief Andy Hart take over at Investec Asset Finance, and 1PM Plc acquiring Bradgate Business Finance, but the news was tempered by the death of Hugh Sigrist, the architect of Renaissance Asset Finance, a timely reminder that the unthinkable can always happen. Our inside pages were also returning to the problems of attracting young blood into the industry, and the growing burden on brokers and funders of regulation. But the dash for growth continued with some momentum.
That month we published a list of peoples’ promotions/moves as we do each month, and there were over a dozen, whereby it struck us that the number of name changes and address changes we had been receiving (for some time) for subscribers to our magazines had never been so high. We could only deduce that there was a lot of job-changing, and also companies moving premises through upsizing or downsizing. Checking with the leading recruiters revealed that they were all having record years!
In May 2016 we reported that Academy Leasing, acquired the previous year by 1PM, had bought a large book of vehicle fleet receivables which threw off a good yield and would provide cross-selling opportunities into the new customer base for the rest of the 1PM group. Mike Randall, who had just become ex-CEO of Close Brothers Asset Finance, emerged unscathed from his sky-dive and subsequent fall to earth, and had raised £9,500 for charity.
By June 2016, although there was no fresh acquisition news, whoever you talked to would give a conspiratorial wink of pantomime proportions and say, “Watch this space,” hinting at another acquisition in the offing, or, “There’s a big one coming, but we can’t say anything.” But that was all before June 24th, the morning after the nationwide Brexit vote, when the asset finance industry found itself back in What-Now-land.
The next issue was full of Brexit comment and how it might affect asset finance. Looking back at the comments at the time, they were all very sensible considering the limited information that was available. Unfortunately, six months later, we’re still not much the wiser. But for a while, the acquisitions stalled, Shawbrook found a multi-million hole in its asset finance operation, and after three years in rundown mode, ING Lease UK had finally switched off the lights for the last time, leaving some wondering if ING had seen Brexit coming all along.
August 2016 had plenty of good news as Aldermore, 1PM, and a number of others announced their results, which were all stellar, reflecting the very good year that had ended before the Brexit vote, but there were no acquisition announcements. There was talk of a pause to draw breath, plans being put on hold, and Virgin Money pulled a U-ie on it’s move into asset finance.
September, it was hotting up again, Paragon Bank had bought Premier Asset Finance for an initial consideration of £8.5 million with more to come, a lot less than Paragon’s previous foray into the asset finance market for Five Arrows Group but a goodly sum nevertheless.
Another month, another acquisition. Maxxia acquired Eurodrive Motor Finance, so had the UK’s asset finance industry shrugged off any Brexit blows, unlike the residential property market, the Pound Sterling, or the price of Marmite?
Then just as we thought that was it for the year, Vikki Fisher, joint MD of Renaissance Asset Finance, told us, “Renaissance Asset Finance are thrilled to announce that contracts have been exchanged with Arbuthnot Latham, and look forward to continuing the success story that Renaissance has been since the beginning of trading in 2014. Whilst 2016 proved to be a very challenging and difficult year for our team, opportunities exist even in the toughest of times and we look forward to 2017 and working as part of the Arbuthnot Banking Group PLC.”
So whatever the future uncertainties, it has been a significant year for lessors,brokers, and the service companies that make things run smoothly. The asset finance industry should feel blessed that business has been so buoyant, and that its people have done well, and here’s to its good fortunes continuing!