Oliver Wilson of Shawbrook in discussion with North West Business Insider Editor Simon Keegan.
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00:00Hi, I'm Simon Keegan, I'm the editor of the Northwest Business Insider, and I'm joined
00:14today for a very special business interview with Oliver Wilson, head of ABL at Shawbrooke.
00:21Thanks for joining us.
00:22Always nice to see.
00:23You too.
00:24So tell us a little bit more about your, I suppose, new role in Shawbrooke.
00:29What does that entail?
00:30Sure.
00:31So I lead our asset-based lending, or ABL, business at Shawbrooke, which is fairly self-explanatory,
00:36but I guess I view this role very much as a growth role for this business, for Shawbrooke.
00:41The asset-based lending industry is a reasonably mature industry in the UK market, and it can
00:45be hard to grow in mature markets.
00:48So for me, my remit very much is to bring a growth mandate to the asset-based lending
00:53business at Shawbrooke, and I'm excited to do that.
00:55Right, fantastic.
00:56Well, the ABL community is one that we see grow.
01:00We do our ABL dinner every year, so it'll be good to see you guys at that.
01:06So tell us about the market.
01:07I mean, it's been, as everybody knows, it's been an eventful couple of years politically
01:14and sort of economically.
01:17So what's your sort of outlook for 2025?
01:19Yeah, I think the outlook's pretty decent for 2025.
01:23As you said, it's been a very challenging time, and actually, a lot of the time, uncertainty
01:26is the killer of the M&A market, which is where most of our opportunity and most of
01:31the transactions we get involved in come from.
01:34As we move into 2025, I think a lot of the uncertainty elements have been removed a little
01:39bit.
01:40We feel like the markets can deal with bad news because you can plan for bad news that
01:44you know about.
01:45It's the uncertainty that causes the problem.
01:46So whether that's been interest rate rises, whether that's been the change in government,
01:50whether that's been the budget, hopefully now all of the uncertainties are out of the
01:54way.
01:55There's obviously still a world of geopolitical issues going on as well, which inevitably
01:59has an impact.
02:00But I think certainly going into 2025, I certainly feel optimistic about growth, about the M&A
02:05market in general, and that's what feeds into what we do.
02:08Yeah, yeah.
02:09Now, you talked about growth.
02:10You talked about M&A.
02:11I mean, a few years ago, that's not really where people would associate ABL, is it?
02:18Sometimes it would be that maybe if you were struggling or if it was a last resort, you'd
02:22look at asset-based lending.
02:24That's all changed now.
02:25I know of loads of businesses that are utilising ABL for these, as you say, these growth events
02:33and things like that.
02:34That's what you're focused on, isn't it?
02:36Absolutely.
02:37And the basis of the ABL structure is in working capital and current assets, and that remains
02:42the case.
02:43But many, many more borrowers now are choosing ABL as a structure because of the flexibility
02:48it can provide, because of the way it can grow with the businesses that they're looking
02:51to grow with as well, and are now choosing to use that structure for M&A as well as growth
02:56initiatives.
02:57So it's very much not a kind of lender of last resort type structure anymore.
03:01It's become a lot more mainstream and a lot more at the forefront of people's minds, for
03:04sure.
03:05Yeah.
03:06Is it also more mainstream in terms of the types of sectors?
03:08I mean, I think in the past, maybe people would think, well, you have to have sort of
03:14heavy machinery and plant to look at ABL.
03:18Is it a bit more diverse now, would you say?
03:20It certainly is a bit more diverse, for sure.
03:22I mean, obviously, you have to have some assets, but typically, that can be receivables, it
03:26can be inventory.
03:27Obviously, it still can be plant or property.
03:29But increasingly, certainly at Shawbrooke, we're able to combine the asset-based part
03:34of the structure with a more leveraged finance cashflow-based part of the structure.
03:38And that's certainly an element that served us well in recent years and is a key part
03:42of our growth strategy to be able to make sure we can still blend those two structures
03:46together to give a customer a really unique solution.
03:49So we have changed things around a little bit, but that's really just to better set
03:52us up for growth going forward.
03:54We know that for our customers, we have to add value to these transactions and we have
03:58to win every deal in a competitive market.
04:00So for us, we're always looking about the evolution of our business and the best way
04:04we can serve our customers.
04:06And for us, that's been about focus and expertise, really.
04:08So the way we've organized ourselves now is to make sure that we've got absolute focus
04:12on both the ABL and our other products, and that we've got dedicated experts who can provide
04:19the absolute best-in-class solutions for our customers.
04:22And we think that sets us up well for growth whilst maintaining that ability to work together
04:27as two teams side-by-side to deliver combined solutions for people as well.
04:31So for us, it's very much about setting ourselves up to be able to give the best experience
04:35to the customer in a competitive market.
04:37So is there any changes to your focus in terms of geography or deal size or markets or anything
04:42like that?
04:43Or is it mainly a kind of, as you say, focus?
04:46Yeah, I think not hugely.
04:48We're still a national team providing national coverage.
04:50We're focused in and around our three regional hubs of Manchester, London, and Birmingham.
04:56But we're still a national team providing solutions across the whole country.
05:00Deal size-wise, we're still targeting that kind of 5 to 50 million of debt sort of zone.
05:06So not a huge change to the target markets, but just a better way to organise ourselves
05:10to deliver for the customer.
05:11Very much in that SME space, and certainly here in the North West, and I know this is
05:17going out to all of our regions, that's a real lifeblood of the business, isn't it?
05:22The owner-managed, the family businesses, those businesses in that space.
05:26Yeah, you're absolutely right.
05:27And they're the businesses that we thrive off dealing with, because we want to deal
05:31with businesses who have got exciting plans, who are growth businesses.
05:35We want to go on that growth journey with them.
05:37And actually, that's where we can add value as well, where we can help management teams
05:40who might not have used the ABL before, they might not have had debt before, they might
05:43be doing their first M&A transaction.
05:46And that's where we're set up to hold their hand, to help, to provide advice, to make
05:50that process as simple and as beneficial for them as it can be through that process, and
05:55that's really what we're about.
05:56And you talk about that kind of 5 to 50 sweet spot, I mean, hopefully, you'll see businesses
06:02coming in at 5 and still working with them when they're at 50.
06:05And that's the dream for us, really.
06:07We're a growth organisation as well, and of course, one of the best ways for us to grow
06:10is to back growth businesses and then go on that journey with them.
06:13And that's very much been at the centre of how we've organised ourselves and the types
06:17of transactions that we want to do.
06:18So very much for us, taking in a business, like you say, when they're at 5 million, going
06:22through that journey with them to one or two exits time is absolutely the dream customer.
06:27And so you're on that growth journey as well, aren't you?
06:30And I suppose in some respects, you're growing with the clients in that way, aren't you?
06:35Exactly.
06:36That's exactly it, yeah.
06:37Yeah, yeah.
06:38And so it's when I've spoken to Shawbrooke in the past, you've always emphasised that
06:42kind of personal approach, and I almost think of it as quite old school in a way.
06:47You know, in, I don't know, like the 60s and 70s, your bank manager would know you by name
06:52kind of thing, whereas I don't think perhaps you don't associate that anymore, do you,
06:57in this computerised world?
06:59You know, are these personal relationships something that you're kind of thriving on?
07:04Absolutely, yeah, they are.
07:05We know, you know, we've sat in front of hundreds of SMEs over the, I certainly personally have
07:10sat in front of a number of SME management teams over the last five years, and we always
07:14ask them, you know, how do you make your choice?
07:16How do you decide which lender you want to go with?
07:18And we ask our customers, what is it you like about dealing with us?
07:21And we know now that, you know, most SMEs and low and mid-market businesses want flexibility
07:27in the structure that we can give them.
07:29They want a relationship.
07:30They want to be able to pick up the phone and talk to a human.
07:33They want to have a regular discussion, actually get value-added input and contribution from
07:38their relationship with the bank.
07:40And they also want certainty of delivery.
07:42They want to know that if we've said we'll deliver something in a time frame for them,
07:45particularly for M&A, that we can stand up and do that.
07:48And that's really what we've focused in on completely.
07:50That's what we know our customers want, and that's what we try and do.
07:53There's nothing better, is there, than just that personal approach.
07:56As you say, it's about relationships, people by people, don't they?
07:59And if you can, as you say, build those lasting relationships, you're going to go with those
08:04businesses on that journey, aren't you?
08:06That is the plan, and that's served us well so far, and I think hopefully we've set ourselves
08:10up well to continue to do that through next year.
08:12Absolutely.
08:13Well, thank you for joining us.
08:15It's been great to talk to you.
08:17Thank you all for watching, and I'm sure you can find any of the latest news from Shawbrooke
08:23on insidermedia.com.