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Investor Spotlight: Adam Agius, OakNorth

In Planning growth, Raising finance, Rapidly scaling - 2 years ago - 5 min

Investor Spotlight: Adam Agius, OakNorth

Every month we talk to an Investor from our network, who invest in early-stage businesses seeking to raise up to £10m in equity and debt finance. This month we spoke to Adam Agius, Director of Debt Finance, at OakNorth. 

OakNorth is a UK bank that provides fast, flexible and accessible debt finance to fast-growth businesses and established property developers and investors.

Since its launch, OakNorth has:
• Generated £10.6m profit (annual results 2017) and repaid all its accrued debts, all before it turned two years old;
• Grown its loan book to over £1.2bn, directly helping with the creation of 5,100 new homes and 4,000 new jobs in the UK;
• Secured £364m in investment from a number of investors, including: GIC, Toscafund, Indiabulls, Coltrane, The Clermont Group, and Indiabulls, valuing the company at almost $1.3bn;
• Raised deposits from c.13,000 savers;
• Won numerous awards and been recognised as one of the UK’s fastest-growing businesses being listed on both the Leap 100 (2017) and Tech City UK’s Future Fifty (2018).

Visit OakNorth for more information.

Could you tell us a little bit more about yourself and OakNorth?

I’ve been privileged to have studied and worked across a multitude of sectors. I did a degree in Chemical Engineering at UCL and then went onto qualify as a Chartered Accountant at PwC, working with many global corporates and institutions. I took the step into debt finance with The Bank of London & The Middle East which enabled me to work on GCC and UK based transactions. The opportunity to join OakNorth was one I couldn’t turn down – every day, I’m surrounded by highly motivated people and entrepreneurial leaders who are inspired by their own experiences to create a bank that supports businesses when they need it. By combining sophisticated analysis and processes with an old fashioned personalised service, we’re able to offer SMEs a borrowing experience that is truly challenging the status quo.

We obtained our banking license in March 2015 and began lending in September 2015, offering fast, flexible and accessible debt finance to established / profitable UK businessses, property developers and property investors. We also offer a range of competitive savings products (fixed bond, easy access and notice accounts) to individuals, as well as fixed bond accounts to businesses, and have c.13,000 savings customers. Rishi Kholsa, and Joel Perlman were inspired to launch OakNorth following the challenges they faced in securing debt finance from high street banks for their previous business, Copal Amba (which they scaled to c.3,000 employees and sold to Moody’s Corporation in 2014).

We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

How big is your portfolio? And how much do you typically loan?

Our loan book currently stands at £1.25bn and we have a further £1bn of qualified loans in the pipeline so expect to end the year with a c.£2bn loan book.

We lend between £0.5m to £30m with the average loan being about £4m.

What are the top three things you look at when considering a new investment?

Strong cash flow
Every loan we write at OakNorth is driven by the customer’s ability to repay it, which starts and finishes with a healthy cashflow forecast. Typically, our borrowers generate between £5m – £100m in annual revenue and must be profitable businesses or established property developers.

An excellent management team
Since our launch, we have been focused on one thing; solving the problem of scaling non-standard lending in the UK, backing quality management teams in the process.

We did a £20m loan to Brasserie Bar Co. last year to enable the business to open over 25 new sites and hire an additional 700 people. This is an ambitious and entrepreneurial business which, despite uncertain market conditions, has continued to expand every year since inception, even during the recession. The business is celebrating its 22nd anniversary this year, yet has managed to stay fresh in an increasingly competitive market by expanding its offering into new formats and settings, and rebranding at the opportune time. The management team, which includes CEO, Mark Derry, and finance director, Helen Melvin, is a perfect example of the kind of team we look to lend to. They have grown a fantastic business which we have no doubt will continue to go from strength to strength.

Having skin in the game
When seeking growth capital, a big tick for us is seeing that the borrower has skin in the game and has invested some of their own money in the project. OakNorth was founded by entrepreneurs, Rishi Khosla and Joel Perlman, who invested their own money, and almost half of our workforce are shareholders in the company, having purchased equity in it. We want to see this same commitment from our borrowers.

The savviest of businesses develop relationships with multiple financial institutions, using multiple providers to ensure they get the best of every product.

Are there any companies you’d like to highlight that you’ve worked with?

We’ve been extremely fortunate to have worked with some of the UK’s most recognisable and reputed businesses, from hotels, private equity firms, nurseries, restaurants and care homes, to tech businesses, media companies, bars, property developers and security firms.

We have helped over 200 UK businesses achieve their growth ambitions and have loved working with all of them!

What are the big red flags for you when reviewing investment propositions?

  • Poor cash flow
  • Unrealistic forecasts
  • Incoherent growth plan
  • Tension or lack of synergy amongst senior management
  • No skin in the game

I wish I saw more…

Businesses shopping around and taking a whole of market view when it comes to borrowing.

According to the Competition & Market Authority’s Retail Banking Investigation last year, 90% of SMEs in the UK bank with either Barclays, RBS, Santander, Lloyds or HSBC, and 90% of those businesses only go to their current account provider when seeking a loan. If they get a ‘no’, they don’t go anywhere else.

This is a huge mistake. The savviest of businesses develop relationships with multiple financial institutions, using multiple providers to ensure they get the best of every product. At OakNorth, we’re not trying to be all things to all people, we just want to do one thing really really well – loans. Everything we do is focused on how we can improve this proposition for the customer, ensuring that speed, transparency, flexibility and entrepreneurialism are present on every deal.

I wish I saw fewer…

Businesses selling out too early or diluting because they have a negative perception of debt or are deterred by it because they think it will be too long and too complicated a process.

If you are a profitable business with a proven business model, there is no reason why you shouldn’t be able to secure debt.

What I wish I could tell every founder…

One question that founders always ask is “how do I get my team care to care as much as I do?” We’ve found that a great way to do this is to give your team the chance to buy equity. A lot of businesses offer equity options or bonus shares, but when an employee actually has to invest their own money and purchase equity (as opposed to just being given it), it completely shifts the mindset and makes them feel like a genuine owner in the business and as such, they will negotiate harder, care that much more, etc. So a key piece of advice we’d give to founders is give your employees the chance to buy into the business – it will not only make them more committed but it will also give you the chance as a founder to see who is invested for the long term.

What do you see as the next industry to be disrupted?

I think SME lending is still being disrupted and there’s plenty more innovation to come.

In the UK, we’re continuing to disrupt SME lending via OakNorth, but overseas, we’re doing this by licensing out the fintech platform that OakNorth is built on (ACORN machine – our sister entity) to other banks, so that they can replicate what OakNorth is doing with SME lending in the UK, in their own market/s.

The platform uses machine learning and big data uses technology to apply the rigorous credit analysis methodology used for large corporate loans in a much more efficient and less manual way.

So I think we’ll continue to see this sector being disrupted with the emergence of new technologies such as artificial intelligence, blockchain, etc.

How should a business seeking finance approach you?

You can call us on 0203 598 6230 or email us at

If you are thinking about raising investment for your business and want to understand your options, get some free guidance from one of our team team today on 08081 722350 or drop us an email: