VM Group has expanded its services in the United Kingdom by carving out a niche in the real estate financing market through its subsidiary VM Finance (UK) Limited.

Formed in 2018, VM Finance provides funding to real estate developers in the UK market which are unable to access financing from traditional financial institutions. Today, the operation contributes 10 per cent to VM Group’s bottom line.

Commenting on the growth of the subsidiary, CEO of VM Finance UK Leighton Smith noted, “We have been able to establish ourselves as a specialist non-bank funding partner to experienced property developers in the United Kingdom. This grew out of seizing an opportunity that we saw in the market space where…you had clients that were not necessarily being served by the high street banks.”

“We help to fund development and investment opportunities for residential, commercial and mixed-use properties,” he further explained.

According to Smith, VM Finance has been able to diversify the VM Group’s offering in the UK by not only serving members of the mutuality, but also to provide financing to a disenfranchised customer base by leveraging its understanding of mortgages and property development to create a “value proposition” through “relationship lending”.

As such the financial institution now boasts a loan portfolio in excess of £50 million.

“What we have earmarked to do in five years, we have done in three and a half [years],” Smith outlined, adding that the company has turned its attention to delivering some “ambitious targets” in the medium term.

“In fact, it has done so well that we actually secured some additional funding from that market to take us further in terms of accelerated growth,” VM Group president and CEO Courtney Campbell outlined.

Secured from “high street lenders”, the new round of funding will be used to further scale VM Finance UK’s loan portfolio in the real estate finance space.

When asked to explain what opportunities there were in the UK, Smith pointed out that there were developers who were “underserved” by mainstream banks because they either ignored their applications for loans or brought them through a lengthy “bureaucratic” process. He noted, however, that VM Finance found value in the projects given the high demand for residential and commercial properties especially in London.

Smith also explained that the developers usually purchase older Victorian homes to “flip” them, and thereafter maintain the properties as real estate investments or sell them at a profit. The developers have also converted some older buildings into commercial properties.