Marketplace lending, the new buzzword for peer-to-peer (P2P) lending, is a fast growing platform that offers an alternative to traditional banking.
Steve O’Brien, Managing Director of Sancus (Gibraltar), has only been in Gibraltar since June last year and has already established a strong team of 4 people working from their offices in Main Street. “It has been a manic start,” he says.
“Sancus opened doors on 1st July but we had our official launch in November at The Rock Hotel at which we were privileged to welcome the Chief Minister, especially because it was only two days before the election.”
Born and raised in Tullow, County Carlow in Southern Ireland, Steve’s life was destined to be very different. With a high profile rugby playing brother, Sean O’Brien, a member of the British & Irish Lions squad and an Irish International, Steve himself had an illustrious rugby career until he retired as captain of Jersey in 2012. “I had wanted to be a PE teacher and I went to University in Dublin, but fate led me to the finance industry,” Steve says.
Moving to Jersey at the age of 18 where his uncle lived, Steve had a reconstruction operation on his shoulder after a dislocation and stayed on to play the sport as an amateur then a semi-professional and finally as a professional. “Rugby opened up a lot of doors for me on the island – it is the most high profile sport over there – and I was highly involved in how they soared up the league,” he states. “That opened up doors business wise and, coupled with a lot of hard work, it kicked me in the right direction,” Steve laughs at the unintentional pun as he says this.
Although only 36 years of age now, Steve’s experience in the finance sector was gleaned during a period working at a stockbrokers for five years and ten years with Nat West RBSI until he was asked to set up a corporate office for Santander in Jersey in 2012. A brief encounter with a potential client led to Steve’s involvement with Sancus. “He had a couple of business ideas, one of them was Sancus,” Steve states “and he explained it very simplistically as based on an old school banking peer-to-peer model.”
Sancus Limited was founded in Jersey at the end of 2013, opening its Guernsey office in January 2014 and was acquired by the Guernsey-based, AIM listed lender GLI Finance in December that year. Steve elucidates: “Each Sancus is a standalone entity – Guernsey, Jersey, Isle of Man and Gibraltar and we are also looking at setting up in Malta and maybe the Cayman Islands.” GLI have a 25% shareholding in Sancus Gibraltar which Steve says keeps the synergy between the Group and the original Sancus, with the Jersey operation considered to be Head Office.
Marketplace lenders enjoy the advantages of the financial system, without the costs, and can operate more quickly than a traditional bank could. “We deal with entrepreneurs and high net worth’s, providing speed and efficiency of service for our borrowers,” Steve states, continuing “we have done some deals within seven days from start to finish – security perfected.” Borrowers come to Sancus from all corners of the globe including the Isle of Man, Scotland, UK, Jersey, Guernsey and Gibraltar, with core lenders in the Cayman Islands, Singapore, and Hong Kong.
“Provided we fulfil all our KYC’s we are open to clients anywhere and, because we perform full due diligence on both borrowers and core lenders, we cover all bases and don’t leave any stone unturned.” Coming from a traditional banking background Steve is quite aware of how long things can take and the red tape that has to be gone through to get things done. “There are a lot of clients out there who may tick nine out of the ten boxes but if you don’t click ten out of the ten, you don’t get the facility you are looking for.”
“Sancus takes a more holistic view of what the deal is and how it is structured and because we have got a background in offshore markets and trusts – intermediate markets – we have a good grasp on how things work.”
Steve was keen to point out that there is no risk but that Sancus tries to mitigate everything as much as possible. “We do full credit assessments and we meet borrowers,” he states. “For instance, if a loan is secured against a property, we go and view the property and we get RICS valuations, so we do everything a bank would do but we do it quicker and more efficiently.”
“Our average loan book in Gibraltar is 16% loan to value which is incredibly low, probably too low at the moment, so we are trying to bring that up a little bit,” Steve states.
Asked why Sancus chose Gibraltar to set up an office, Steve says that they came to the jurisdiction mostly because of the low default rate. “Everybody knows each other so it is less likely for someone to default, otherwise their reputation might be in tatters.” He elucidates on the point by likening Gibraltar to Jersey and Guernsey: “They are small jurisdictions and we like places that we can understand and get to grips with, so Gibraltar ticks all those boxes for us.”
Regarding complying with FSC regulations, Steve says that in that respect Sancus has a money lenders’ licence. “It will be a matter of time until the industry as a whole becomes regulated, but we have found that the regulators and the Government here are very open to discussion and they have both been very supportive.” He went on to comment that in the present climate where established lenders have left Gibraltar, the market was ready for a new a lending company.
Although having only been in Gibraltar for a short space of time, Steve has identified a need for a niche requirement for local people in the form of an affordable housing mortgage product. “It is something we have incorporated here specifically and under our subsidiary, The Gibraltar Mortgage Company Ltd., we will launch a tranche of cash (about £1.5 million) in stage one and then look to increase on that substantially as we go forward,” he says.
With marketplace lending such a massively growing industry, Steve is confident that Sancus is in the right place at the forefront of the UK Gibraltar offshore market. “It is an exciting time for us and the message I want to get out is that Sancus is here for the long haul – so come and find us!
Greatest achievement: My family; my wife and 3 boys. I am very proud of them all even though they are only young but at least I have got the back row in a rugby team sorted!
Unfulfilled ambitions: If I could turn back the clock, who knows what would have happened if I hadn’t been injured and maybe I could have gone on in the same vein as my brother. However, I am very proud of Sean and good luck to him
Idea of happiness: I am a very happy person and enjoy the simple things in life. An ideal day would be a warm sunny day, nice blue skies and a BBQ with friends and family Best thing about Gibraltar: The people are very friendly and I have been welcomed with open arms
Sport: Rugby is the main one, of course, and I have started playing again here in Gibraltar, but I also enjoy a round or two of golf
Something not generally known: Everybody knows that I am very competitive, but what they don’t know is that after rugby training I like to listen to classical music on the drive home – and I also love musicals!
Motto: There are two edicts that I live my life by, the first based on Muhammed Ali’s quote;
“It’s the repetition of affirmations that leads to belief And once that belief becomes a deep conviction, things begin to happen.”
Effectively, if you believe in something enough, you can make it happen. The other is taken from a great poem:
‘The Indispensable Man’ with the moral being that basically there is no indispensable man; “Take a bucket and fill it with water, Put your hand in it up to the wrist, Pull it out and the hole that’s remaining, Is a measure of how you’ll be missed”
Part of the Sancus ethos is that we work hard but we also have lots of fun and we try not to take ourselves too seriously.