Exclusive interview for Bridging & Commercial Magazine with Karis CEO Nicholas Christofi.

Our CEO Nicholas Christofi was invited for an exclusive interview with B&C Magazine. Nick shared his views on the current property finance market and our exciting plans to redefine specialist finance broking.

Read the full article below:

In Pursuit of excellence.

There’s a new real estate debt advisory firm in town, led by none other than industry stalwart Nicholas Christofi. With great ambitions to redefine specialist finance broking and handle everything from start to finish, Nick shares how Karis Capital aims to harness the power of partnerships.

Nicholas Christofi has made a name for himself as one of the top specialist finance debt experts—so, when he announced the launch of Karis Capital at the end of last year, the news quickly made waves across the sector.

For Nick, creating his own real estate debt advisory firm was the next big step in his already prolific career, and a chance to continue doing what he loved with the core people he had worked with for many years. “When I look back at it now, I don’t think I could’ve found a better time [to create Karis Capital]. We launched when the market was a bit flat and market sentiment started to come back. We got a little bit lucky in terms of this: the timing was right,” says Nick.

Together with his expert team—including Craig Hardiman-Scott, Ben Hall, Leoni Alexandrou, and Kimberley Gates, who spearheaded the process of setting up the business’ infrastructure in a very short time—the brand was unveiled at the end of November 2023, with the aim of redefining how developers and investors navigate the complexities of real estate financing.

Karis Capital offers nationwide expert counsel on debt and equity, including develop-ment funding, short-term lending, investment finance, commercial mortgages, HNW mort- gages and asset finance. Its proposition differs from that of a regular mortgage broker—Nick describes Karis Capital’s service as that of an external finance director, tasked with handling the business’ financial needs from beginning to end. This includes analysis of the firm—including free financial reviews of people’s property portfolios—and advice on structuring both short- and long-term finance for the sake of the client’s longevity and prosperity. “We’re not trying to reinvent the wheel. We’ve always been focused on service and deliverability, rather than simply pricing—for us, it’s very much about the whole business, and our focus is on relationships, on both the lender and the client side,” adds Nick.

The full cradle-to-grave service is possible through the real estate debt finance firm’s extensive partnerships with specialist finance lenders—with whom Karis Capital develops and provides a range of exclusive limited products—as well as third parties, including lawyers, surveyors and valuers. “The main things we look for in the right lender partner are transparency, communication and deliv- erability—these are the values that we have as a business so, in turn, we have to be working with lenders that share those values,” says Nick.

Insurance: a big deal

In addition to its extensive financial advisory services, Karis Capital has launched an insur- ance arm, which will provide advisory services on a range of policies, including landlord, BTL, commercial property, liability, professional indemnity and cyber insurance. The reason for offering this goes back to Karis Capital’s aim of delivering a cradle-to-grave proposition. Nick explains that this service brings benefits to both property investors and developers, as they will be covered for any damages from any eventuality, as well as lenders, as they will in turn be confident that the assets they are lending on have got the right cover, thus lowering risk. “Financial advice and insurance go hand in hand. Everything that we want to do is about creating value within a business and being able to look after everything for the client in that stage of the transaction—and insurance is a huge part of it. There’s no point [investing in property] if you haven’t got the right level of cover and are not getting the right advice,” explains Nick.

The launch of an insurance advisory arm comes at an opportune time, as Nick tells me he has seen a growing need for insurance in the UK property market, driven partly by lenders and their requirements when doing their due diligence. “The more complex the transaction, the more complex the insurance package that goes with that. It’s very important to make sure that we’ve got a team that can give the right advice on this because the insurance market is an ever-changing landscape, just like the debt market. Everything’s constantly changing, so we need to make sure we’ve got our finger on the pulse to understand what the requirements are from the lenders and also what the borrowers need.”

Choice: too much of the same?

Having been in specialist finance for more than a decade, Nick has seen numerous changes and weathered plenty of storms. As we talk about how this industry has evolved over the years, he notes that more people are aware of and interested in specialist finance, particularly retail customers who have previously focused on high-street banks.

With a growing audience and thirst for specialist finance, is there enough choice in the market to quench this? The answer is more complicated than yes or no. While there are plenty of lenders in this space, Nick observes that too many have the same funding lines backing them—many of which hold great control over lending appetite—so are too similar with regard to lending policies and pricing. “When the choice is very similar, is there real value there? I’m not sure there is. We would like to see more finance providers in the market that have discretionary capital and can make a decision [themselves], rather than revert to their funding lines,” he says. This is why a lender’s funding line is one of the key factors that Karis Capital looks at when considering which firms to partner with.

It’s not just advisers who are doing their homework on lenders’ funding lines but also borrowers. Nick notes that more clients, especially experienced property investors, are paying particular attention to how a lender is capitalised to ensure they have strong, good-quality funding lines in the background and are here for the long run—a quality that has become as important to borrowers as cheap pricing when considering which lender to go to. “It’s not just about the lender doing the due diligence on the borrower but also vice versa, and part of the role we play as advisers is giving the pros and cons of each deal we’re offering. You could have the cheapest loan on the market but, if that lender isn’t well capitalised and doesn’t understand the credit risk, then that’s not the right deal for the client. It’s not simply about the price; it’s about finding the right partner,” he elaborates. 

Purpose built for old and young

When it comes to the biggest areas of oppor- tunity for property developers and investors, Nick is confident that PBSA and care home schemes will continue to be thriving asset types in 2024 and beyond. “The care home market is a niche but very strong market. People are living longer and will want to make sure their loved ones have got the best possible care during their later years of life.”

Aside from these, Nick sees great potential for the BTR sector, as he expects more institutions and pension funds to invest in these types of schemes towards the third to fourth quarter of the year. “The BTR market is ever evolving and will really help address the shortage of housing that we’ve got. With interest rates where they are now and yields being squeezed, we’re just waiting for the market to settle a bit more before the institutions come back into BTR.”

Values versus numbers

With Karis Capital officially launched, the team is now gearing up to the next phase: growing the business steadily, becoming as profitable as possible, expanding partnerships—particularly with housing associations, with whom the team is keen to work—and carving a place for it within the specialist finance market. “It’s all about taking the business to the next level, and we have no doubt that we’ll achieve great things. I don’t need to sit here and talk about numbers; for us, service excellence, being transparent and honest and doing everything with integrity for our borrowers and our lenders—these are the values that we that we live by and we feel that, if you do those things, you’ll have a successful business,” says Nick. “Our ultimate aspiration is to become a brand that’s synonymous with excellence. We’re not interested in being the biggest—we want to be the best.”

Originally published in Bridging & Commercial | Magazine (bridgingandcommercial.co.uk)