LFP117 – Specialisation & P2P Retail vs Institutional Funding w/John Goodall CEO Landbay

How are the changing tides and winds in newFS vs oldFS lending? How are the incumbents and newbies doing? How is the balance of institutional funding of P2P and retail going? What’s the best way to succeed? When does accepting institutional funds turn into just being a front-end for oldFS?

Landbay only do buy-to-let mortgages and since their first loan four years ago have done nearly one thousand loans with a total lent of over ยฃ200m and an astonishing 0% loss rate which is a tribute to their strict credit criteria (average LTV 70%) as well as operational efficiency.

They recently won the 2018 Best Buy-To-Let lender of the Year award ahead of Barclays, Lloyds and – well – all others ๐Ÿ˜€

They were also placed #20 in Deloitte’s Fast Tech 50


Topics discussed on the show include:

  • the memorability of podrecording years later
  • now up to 60 staff
  • the emotive topic of choosing schools, boarding schools and the British
  • was Harry Potter a conspiracy of boarding schools?
  • John’s creation and sale of a head-hunting business
  • John’s teaching of economics at Westminster School and Norther Rock
  • how to go from head hunting to teaching
  • John’s presentation atย Lendit Europe 2018
  • the maturing of Fintech as John’s presentation was focused on business not P2P/Fintech
  • “what you realise is that from a borrowers perspective they don’t care that its P2P”
  • how to compete with banks and in that context too competing with P2P is not the point
  • “we think about the BTL market not the P2P market”
  • “the advantage of marketplace lending is to bring new sources of capital into the market”
  • why Landbay has been so successful
  • specialistionย as the #1 reason in business focus, hiring, culture
  • SmallCo culture of motivation, everyone has options
  • “you can get into a vicious circle”
  • specialisation-generalisation across P2P and Fintech; generalisation relies on cross-selling where all the evidence is poor historically
  • the challenges of starting a low risk company
  • “valuations are not a science but an art”
  • operational success is to have taken a lot of people from oldskool FS who are specialists in BTL
  • retail vs institutional funds
  • “most of the growth of platforms has come form institutional funds and that’s a positive thing”
  • impact of institutional funds on platform due-diligence vs purely retail firms; differential “problem” rates as a result?
  • “despite what you might think large fund managers are getting more assets”
  • two broad types of institutional capital – funds and banks parceling their capital out to ~outsourcing a business line
  • this has been seen especially in the US but also in UK Metro/Zopa, Barclays/MarketInvoice
  • different motivations/levels within banks and how this impacts motivation – portfolio, risk, returns, margins
  • is it white label if you do everything? Cf MunichRe in Insuretech where you can plug-in at any level of the value chain?
  • predictability of funds, deployment programs
  • what would John now tell John three years ago?
  • the importance of the intermediary market
  • the relative ease of promoting their product to retail once they have a long track record
  • a shoutout for new smart devs ๐Ÿ™‚
  • John’s specialisation re background in recruiting

And much much more ๐Ÿ™‚

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