With the recent market turbulence and the expected changes in the business environment worldwide, it’s becoming clearer every day that “business as usual” is changing. It appears likely that the coronavirus outbreak will weigh on economic activity, at least short-term, with European equity markets having fallen by more than 25% in the past month.
The good news is that real estate is neither the cause nor the centre of this problem like it was in 2008. Here in the UK, strong pent-up demand following years of Brexit malaise has been in strong evidence this year, with property transactions in the capital showing a 26.4% year-on-year increase last month and agents reporting viewings up over 50% year-on-year. Notably, February was the fifth consecutive month of UK house price growth – the first time this has happened since early 2016.
We founded Hilltop Credit Partners with a view of helping SME developers who were tackling the structural shortage of housing stock in the UK. That theme has not changed, and in fact, with markets shifting, the opportunity in this market sector will continue to provide Hilltop with investment opportunities. We remain focused on funding high-quality assets and developers, and remain confident that many of our new opportunities will provide us with even better pricing and opportunistic returns, whilst we continue to help developers.
We will work to continue to raise as much capital as possible in the coming months so we can play an offensive game as events unfold and our competition retreats. Our goal is to treat these market shifts as an opportunity to hunt for new deals with attractive expected returns and strong downside protection.
Hilltop’s UK credit product offers flexible financing solutions across the capital structure, combining our unique debt and equity skillset for to identify real estate lending opportunities. Our strategy aims to apply a value-based approach to credit to deliver sustainable, attractive risk-adjusted returns that are largely uncorrelated to equity markets and other asset classes.
The combination of an experienced investment and development team with a strong track record, and a compelling range of debt products will, we believe, differentiate us from many alternative capital providers in the debt space.
I would welcome the opportunity to schedule a call to discuss the deals that Hilltop has funded over the past several months as well as the strong pipeline we have built for Q1 and Q2.
Founder & CEO