In a bid to further increase distribution, Y3S is evolving, welcome to Specialist Mortgage Group.
Y3S have been making significant strides forward in recent years, reshaping their business with a keen focus on evolving to anticipate and meet customer needs.
Already a leading broker/packager, since 2011 they have been pursuing a ‘build and buy strategy’, creating surplus cash and earmarking it for the purchase and growth of new investments. As each investment cycle began, the board’s focus was on buying similar businesses in order to build on distribution and create synergies. By 2017, this resulted in the group offering not just second charge mortgages, but also short-term/bridging loans, buy-to-let mortgages and commercial mortgages.
However, the directors believed that this evolution meant that the name Y3S Group no longer fully reflected who they were and what the did; hence the creation of Specialist Mortgage Group (SMG).
SMG consists of a number of limited companies: Y3S Loans and its divisions (Y3S Private Clients and B2B Financial); Y3S Bridging & Commercial; Chaseblue Loans and Pink Pig Loans.
The managing directors of these companies, Andrew Gage, Nathan Raffour, Ben Gillespie and James Rainbird joined CEO Matt Cottle, COO Barney Drake and CFO Benson Yeadon to form the operational team which will manage the new group.
Cottle explains that the long-term goal of this restructuring is to increase distribution.
“Each company in the group has its own particular set of strengths and relationships with different lenders and banks,” he says. “Each company can tap into the strengths of another to provide the client with a suitable solution.”
The group certainly has scale. Its turnover in 2017 has totalled £12m so far, with net profit reaching £3m. This came from £265m of specialist loans and mortgages completed through 54 banks, lenders and finance houses, on behalf of 2,000 mortgage intermediaries. Y3S Loans is transacting £15m a month in second charge loans alone.
The group opened its first office outside Wales in Stockport, near Manchester in March this year and followed this up with a London office that opened in September. This coincided with a major recruitment drive that saw 16 new starters join at the start of last month and the company now employs 150 staff, a number that looks set to grow as the business does.
Cottle says: “We know that the specialist market is still underserved and our latest branch opening is part of our group-wide strategy to build an increased national presence for an industry that is set to explode across all sectors of specialist mortgages.”
In with the new
In conjunction with the new structure and growth strategy, the business is starting to transact equity release and lifetime mortgages. So what is the thinking behind moving into this sector? Matt Cottle explains: ”The sector is growing rapidly; pensions and savings are not delivering. Buy-to-let rules have tightened and do not favour the small landlord.
“There has been a huge change in the general acceptance of the sector with tight regulation and excellent product development.” According to Cottle, the future will see SMG continue to grow the distribution of the group through organic growth, acquisitions, branch opening and technology.
“Our group name has changed but our mission remains the same: to drive the specialist finance industry forward by providing the best customer experience through the development of people and technology,” he adds. And with that, the Cardiff powerhouse continues its inexorable march forward…
From Y3S Group to Specialist Mortgage Group: a brief history
2006: Y3S Group Ltd created as an umbrella firm for Y3S Loans and its associated businesses
2008: Original two subsidiaries sold off during the credit crisis
2009 – 2010: Y3S Loans continues throughout the credit crisis until the market recovered
2011: The board started looking for new investments. Started with managing directors Andrew Gage and Nathan Raffour to create a joint venture, Y3S Bridging & Commercial in 2011 to take advantage of the growing bridging finance and buy-to-let market.
2014: Acquired 50% of specialist broker Chaseblue Loans
2016: Acquired 50% of specialist broker Pink Pig Loans
2017: Acquired all outstanding shares in Y3S Bridging & Commercial, Chaseblue Loans and Pink Pig Loans. Changed name to Specialist Mortgage Group Ltd.