In 2024, interest rates should start falling and valuations normalise, which will lead to an uptick in transactions. But the looming refi gap and lenders’ patience with non-performing loans is likely to run out, notes Paul Lloyd, CEO and co-founder of Mount Street Group, a global loan services and financial technology company.

What was the operating environment like in 2023 and what were the challenges?

Last year, in itself, was a cycle. It started off with a lot of optimism and appetite for lending, but then we saw inflation and higher interest rates get in the way. That optimism gradually waned throughout the year with a lot of extensions being undertaken, which took the place of new origination. If you look at our loan book, 70-75 percent of our commercial real estate book was extended and renewed for another six to 18 months, with the majority being moved from 2023 to 2024. Some of these deals featured improved terms, such as extension fees and pay downs to prevent loan-to-value breaches and defaults. It has been an unprecedented few years since the pandemic, so being agile, thick-skinned and patient has been crucial. We have used this time to look at additional ways to help our clients, such as in the extra surveillance of loans and portfolios alike.

Your firm was voted  Loan Servicer of the Year: Europe. To what do you attribute your success in that market?
First and foremost, this achievement – our seventh award in eight years – is testament to the team at Mount Street. I’m incredibly proud of the team and the recognition for the exceptional service they deliver to our clients, day in
and day out, is fantastic. We were able to grow our commercial real estate assets under management to €95 billion in 2023 due to our relationships and razor-sharp focus on client service. We think like the client, so we are always challenging ourselves to be better. We see the client as our partner, and this creates a level of trust between us. We have also worked on some market-leading transactions, such as our appointment as creditors’ representative and agent on the €1.5 billion financing for the redevelopment of FC Barcelona’s stadium. We also successfully closed a transaction with Dexia, migrating an experienced team of eight people across to our Dublin office. This type of transaction sets us apart from the competition; we are product agnostic, and our experience means clients see us as a trusted pair of hands.

In addition, you were voted Real Estate Finance Industry Figure of the Year: Europe. Why do you think our readers voted for you?
Maybe because I have been around a long time! On a serious note, I’ve always been honest and open with clients and colleagues. Honesty and integrity are fundamental requirements in the
servicing world, as well as good communication. I set up two businesses before Mount Street and one thing I have learned is that you cannot do any of this alone, and I have been lucky enough to have amazing people around me who have lived that journey with me along the way. I would also like to view this award as a testament to the value a servicer can bring to clients. I also really value mentoring and have focused over the years on nurturing talent, from as wide a base as possible. Mount Street is an active member of the Academy of Real Assets, which aims to open real estate careers to people from all sorts of backgrounds. We have also instigated a mentoring initiative at Mount Street where employees give presentations on their career pathways and tips for entering the finance industry.

For the rest of the analysis, please download the full version via the download button.