Corrected: I managed to call this company MaxCorp in the first paragraph. Its correct name is MaxCap.
Melbourne-based specialist commercial real estate debt funder MaxCap Group has joined New Zealand real estate agency company Bayley Corp Ltd and brokerage Forsyth Barr Ltd in a new non-bank commercial real estate loans business, MaxCap NZ Ltd.
Bayleys & Forsyth Barr founded the company last year, with international financier Anton Douglas’s Grey River Capital Investments Ltd as 20% shareholder.
Mr Douglas sold out in June, Bayleys & Forsyth Barr reduced their stakes to 25% each, and MaxCap has taken 50%.
Farrands to lead investment
The business has appointed Mark Farrands as chief investment officer. He was previously ASB Bank’s Auckland property finance regional manager after 12 years at Westpac & 4 years at Elders Finance, in senior finance roles managing large portfolios of property loans. Mr Farrands has a Bachelor of Property Administration degree from Auckland University and began his 27-year property career as a valuer at Colliers.
Mr Farrands said MaxCap NZ’s objective was to become New Zealand’s premier non-bank commercial real estate lender, focusing on property development projects & investment funding.
“The company’s initial focus is on financing $3 million-plus property transactions, with negotiations already well advanced on funding for a number of land development deals in Auckland & Queenstown.”
Australian shareholder MaxCap Group cofounder & chief investment officer Brae Sokolski said the company had originated & managed $A7.7 billion of loans since it was established 13 years ago, and has $A4 billion of funds under management: “We obtain & actively manage the funds that we use to provide finance via a variety of sources which we have built up over many years. These range from high net worth individuals through to large institutional investors, including major superannuation & pension funds.
“Bayleys will be assisting us with originating lending opportunities through its New Zealand-wide network. We will also be looking to access Kiwi currency funding sources, focusing initially on high net worth private investors utilising Forsyth Barr’s wealth management expertise.”
Bank tightening led the move
Bayleys managing director Mike Bayley said the company’s involvement in the joint venture had been driven by current limitations on commercial property funding from retail banks: “These limitations are, at times, having a negative effect on market activity and are a source of frustration for clients, particularly developers who play a vital role in creating new leasing & investment opportunities.
“It has prompted us to look for alternative sources of finance for clients. MaxCap NZ will be taking a relatively conservative approach, but it will be able to offer more flexibility in its funding and consider more complex deals.”
Jonty Edgar, co-head of markets for Forsyth Barr, said MaxCap’s move across the Tasman would give the firm’s wholesale & institutional clients more commercial property investment options: “MaxCap has a well established track record in Australia for its rigorous approach to risk management. They have a history of returning full principal & interest to all of their investors and delivering on terms issued to borrowers.”
In an article 2 years ago, MaxCap’s other founder, Wayne Lasky, saw a push by the Australian Prudential Regulation Authority to get the major banks back to a “normalised market share” of real estate lending presented a huge opportunity to non-bank lenders: “From my understanding, that equates to a $A40 billion potential funding gap [in Australia].”
MaxCap Group will bring a group of Australian developers to New Zealand in mid-September to look at opportunities, and for MaxCap NZ’s official launch function.
Attribution: Company release.