OakNorth Bank buys 50% stake in specialist property lender ASK

The challenger bank claims the acquisition will help support SME lenders in the event of a potential economic downturn.

OakNorth Bank has purchased a 50 per cent stake in specialist property lender ASK.

Founded in 2016, the independent lender provides finance across a variety of different real estate sectors including both residential and commercial projects, deriving funding from around 250 investors including institutional partners, family offices, and high net-worth investors.

ASK says it has provided £1038m of funding so far across 99 deals.

The purchase, which has already secured regulatory approval from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), will see ASK to continue to operate as a fully independent entity with its team remaining in its offices on Harley Street.

OakNorth Bank said it has already built a strong working relationship with ASK over the last five years, providing structured debt to SME housebuilders and property entrepreneurs across 45 joint transactions. 

The challenger bank said both companies’ business goals are “very aligned”, so the deal will enable both to continue providing funding solutions to customers, using senior bank funding along with other sources of risk capital.

Ben Barbanel, head of debt finance at OakNorth Bank who will be joining ASK’s board, said that ASK shares OakNorth’s focus on customer experience and credit quality. 

Barbanel believes the firm’s platform “enables fast subscription of loans and a strong network effect where many of its borrowers also end up becoming investors”.

The executive went on to highlight the UK’s 300,000 housing gap, and how a potential economic downturn could put lenders off investing in the SME market.

“This purchase, therefore, comes at a vital time for the British economy as it will enable us to deepen our support for SME housebuilders and property entrepreneurs across the UK and through the economic cycle,” he added.

The transaction follows on the heels of OakNorth’s acquisition in December last year of cash flow forecasting business Fluidly, which has over 1,000 UK accounting firms as subscribers.

We could potentially be seeing more even acquisitions from the challenger bank in future.

OakNorth group CEO Rishi Khosla publicly stated in 2020 that the lender was actively looking for “synergistic” opportunities to acquire fintechs at a reasonable price.