speaks to Stephen K. Crisp-Jones, managing director of the Oak Tree
partnership, a brokerage based in Warwickshire
Which sectors do you specialise in?
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High-tech, IT, software, hardware, scientific instrumentation
used by drug-discovery companies and robotics. So they are very
one-off pieces of equipment.We’re also now moving into the area of
providing finance for companies dealing specifically with the
NHS.Those, primarily, are our areas – medical equipment, very
specialised engineering equipment, IT and scientific
instrumentation.
Which banks make up your principal funders?
We work with Investec, Close Brothers, ECS Soc-Gen and all the
main ones, such as Barclays and Lombard.
Where do you source business from?
How well do you really know your competitors?
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By GlobalDataThey come from a variety of third party sources, including
mainstream accountants such as Grant Thornton and KPMG.
Do you have a book of your own?
We don’t have a book of our own. If we get an enquiry,we see the
client and, if it is something we can do, we’ll get an engagement
letter from the client and organise to raise the funds.
What size of deals do you specialise in? What is the
average value of deals?
The size we specialise in is a minimum of £200,000 up to
£3m-£5m.The average value is between £500K and £1.5m.We’re not
interested in doing smaller deals. If someone wants a smaller
transaction, that’s no problem, but we won’t do it ourselves, we’ll
just recommend it.
Are you benefiting from the general scale-down of staff
numbers at leasing companies? If so, how?
I don’t really know. I can’t answer that.
How much new business did you place in
2007?
We raised a range of about £12m.
Do you believe lenders are sufficiently innovative in
their approach to finance products?
The funders we
deal with are. There is one thing they can improve on –
underwriters in finance companies should have the right to see a
potential client. If the transaction is big enough, let’s say
£250,000 and upwards, a lot of the time the underwriters do not
bother to meet clients. All they do is receive the financial
information from ourselves. In some cases, the funders would
underwrite a deal if they’d actually gone to see the client. I
think it’s a fundamental mistake that they make. If they went to
visit the client they can take a much better viewpoint rather than
just simply on the financial information.
Are lenders sufficiently flexible to fulfil your
clients’ needs? If not, why?
In my case, they are flexible, yes.
Do you structure your own deals? If so, how complex can
they get?
All of our transactions tend to be structured. You might get a
situation, for instance, in which an asset is being funded, the
asset is £1m or £2m and the credit, on the face of it, is not
strong enough. That company might be backed by institutional or
private shareholders, so to allow the finance company to underwrite
we might suggest to the shareholders to guarantee a percentage of
the risk.
Do you believe lenders should make greater use of new
technology to deliver a better service to brokers? If so
how?
That doesn’t really bother me.
Do you think brokers need to inform and educate customers more
about the range of products and structured deals available in the
marketplace?
I only inform my customers or potential customers.What other
brokers do, I’m not interested in. I think most brokers are fairly
weak in a lot of ways.
Are you satisfied with the level and format funders use
when granting commissions?
Yes.
Which structure of commission earning do you prefer
(i.e. fixed commission per deal, net/gross options)?
I’m relaxed, I don’t mind.
TINY IN SIZE BUT HITTING ABOVE ITS
WEIGHT
The Oak Tree partnership was formed in December 1995 by its sole
shareholder, Stephen K. Crisp-Jones, and remains a tiny outfit to
this day.
“I work loosely with two other people – we’re a very small
outfit. The money we raise is, probably, greater than the average
broker,” says Crisp-Jones, who operated an IT vendor business,
carrying brands such as IBM, Logica and Xerox, for about 10 years
before he founded Oak Tree.
Crisp-Jones’ experience in IT financing set the tone for Oak
Tree’s specialism in fast-depreciating high-tech assets. In the
first year of business, Oak Tree wrote about £400,000 worth of
deals. This year, it expects to write £15m in deals. “Our overheads
are extremely low, which is an advantage to people seeking our
services,” says Crisp-Jones, who prefers not to discuss the
noteworthy deals Oak Tree has closed in the past.
At the time he spoke to Leasing Life, Crisp-Jones was working to
raise £3m in funds for a client.
With deals averaging about £1m, it isn’t difficult to increase
turnover each year, although new business may be harder to come by
with the financial system buckling under the credit crunch.
“The current uncertainty in the marketplace is affecting us.
People are becoming more risk averse. I think it will be more
difficult to get funding,” Crisp-Jones says.
