USA Christian Faes
Meet the man who helped to transform the UK’s mortgage market following the global financial crisis and co-founded LendInvest, the largest online marketplace for property finance.
Published: 02/05/2024
Few people could say that they helped to transform the Britain’s mortgage market, but Christian Faes co-founder of LendInvest could lay stake to this claim.
Faes didn’t initially start out in the mortgage market and isn’t from the UK. He grew up in Australia and moved to London in his early twenties to be a lawyer. He was also an inhouse legal counsel at a global investment bank but dreamed of becoming an entrepreneur. To pursue the dream, he returned to Australia to set up his own business.
“My first business was a law firm doing property and finance related work and that's where I discovered the short-term mortgage market and bridging finance and started acting for local clients. I then left the legal profession and set up a bridging finance business in Australia. But I was always keen to get back to London. I love London as I like the buzz and excitement of the big city.”
“I then left the legal profession and set up a bridging finance business in Australia. But I was always keen to get back to London. I love London as I like the buzz and excitement of the big city.”
The start of LendInvest
Faes moved back to London in 2008 to set up LendInvest and today it is a leading fintech company and is one of the largest non-bank mortgage lenders in the UK. But starting this business wasn’t easy given that it was launched at the start of the Global Financial Crisis (GFC).
It was the worst time to be setting up a mortgage business in 2008 when the entire world was falling apart. But it turned out to be a suitable time in retrospect for many reasons. We eventually found investors and I enjoyed the fintech buzz in the UK. The government was very supportive of fintech businesses and helped to promote the transformation of technology after the GFC.”
However, the added struggle was dealing within a mortgage market that was in dire need of modernisation. Faes says: “Around 2011/2012 the average mortgage took three or four months to complete and was just a bad customer experience.
“So, we started to build technology around making that experience better and we broadened our product range from just bridging finance to development finance and then eventually went into buy-to let. Now we do home loans as well.”
A few years later, LendInvest completed a £17 million Series B equity investment from Atomico a European venture capital firm, founded by Niklas Zennström, who is also the co-founder of Skype. “They were really helpful in terms of helping us build technology and attract the right talent into the business and create scale,” explains Faes.
LendInvest went through an initial public offering (IPO) in 2021 and is now listed on the London Stock Exchange. It has £3.7 billion in funds under management and benefits from funding partnerships with financial institutions like JP Morgan, HSBC, Barclays, Lloyds Bank and Wells Fargo Bank.
Moving to the US
Today Faes still sits on the board of LendInvest as Chairman and is a major shareholder of the business, but he has moved to the US to try and emulate the UK business’ success with direct lending business Faes & Co. He also co-founded Onate to offer similar services in Ireland and Spain.
Explaining his move across the pond, he says: “We are focusing on short term mortgages and bridging finance in the US. We’ve also got a private credit fund, the Faes & Co Income Fund, which allows investors to invest in this opportunity.”
While creating a business in the mortgage lending space is nothing new to Faes, he highlights that the US market is very different. “Each state has its own laws and regulations, whereas the UK is one big market. The US is a bit of a jigsaw puzzle to piece together as a new entrant.”
A big structural difference with the US market is that long dated fixed rate mortgages are the norm. It’s common for homeowners to take out a 30-year fixed rate mortgage, while two- and five-year fixes are more common in the UK.
“But you have the same dynamics that make bridging finance particularly attractive in that there's a shortage of houses being built in the US - the same as in the UK. This is why entrepreneurs can make a business out of buying dilapidated houses, refurbishing them and selling them on in the US,” says Faes.
He adds: “The US has a housing shortage because not many people want to sell their house as they don't want to then revert to a 7% mortgage. The result is a very gridlocked market. For many people, the biggest asset they have is their 2% mortgage.”
Striving for a bigger result
It took 15 years to establish LendInvest as a leading lender in the UK, but Faes hopes to do this in the US in less time with Faes & Co. “When I landed in the UK in 2008, I had no idea what I was doing, and I had no investors and no borrowers. With the US, I have got a few investors, so I'm hoping I can do it again in a much shorter time with a much bigger result.”
When asked about the best advice he’d ever received during his entrepreneurial journey Faes says it came from his parents. “They told me there’s no such thing as shortcuts or overnight success. It's simply hard work. So, you just get on with it.
He advises wannabe entrepreneurs to take the plunge.
You can think of a million reasons why not to do it. But I would say just give it a go and if you've got the resilience and the desire to make it work, you'll find a way. Too many prospective entrepreneurs just overthink everything.”