Recently relaunched in the credit industry, Manchester-based Hoist Finance UK has been reborn as a ‘new’ business with a clear mandate to buy consumer debt.
Hoist Finance is a familiar name with an established track record across Europe for not only buying but also servicing debt. Today, however, the business has refocused its operations in the UK to concentrate solely on the former and become a premier acquirer of consumer debt portfolios from the banking and wider lending community across the UK.
Adam Young, Hoist Finance Head of Investments, says both their appetite and their capability are significant: “We would like to make significant investments in 2025, and can be very flexible in what we buy and who we partner with,” he says.
Previously a hybrid purchaser and contingent debt collection agency, Hoist Finance UK can now enjoy the freedom that comes from not having to feed its internal operation: “It means we can be more selective in what we buy and both strategic and opportunistic in the portfolios we come across,” adds Ed Horton, UK Country Manager.
“While typically we have earned our reputation for buying and managing unsecured, Non-Performing Loans (NPLs), and will continue to do so, we can also look at secured Performing Loans and SME debt in the commercial space, partnering with the appropriate service providers and peers with the skills to handle more complex cases.”
Hoist Finance differs from ‘traditional’ debt purchasers in the way that it is structured and generates funds: “We are a Credit Institution that takes deposits in seven countries, issues bonds into SEK and EUR markets, and then uses the capital to buy portfolios of consumer debt,” Adam continues. “In many ways it is a very simple model, but it is also very effective.”
Business evolution
Hoist Finance UK began its renaissance a little over two years ago: Ed explains. “The market was challenging, and prices were perhaps higher than we were willing to pay, and so with an ageing book it was decided to sell the UK business and the platform to one of our peers and rethink our strategy.”
Despite having taken the pragmatic decision to sell, there was still a significant appetite within the business to maintain a local presence: “The UK is a mature market with plenty of sellers and volume and there was – and still is – a real desire to become a leading player,” Ed continues.
The strategy Hoist Finance has taken in the UK is a new kind of hybrid, partnering with its peers on a Master Servicing Agreement to manage the collections while Ed and his team focus on buying: “It’s a partnership where we are more of an investor and asset manager,” he says, “giving sellers a classic ‘one stop shop’ with all of the practical and financial advantages this brings.
“Because we are a regulated credit institution and take deposits, we are able to deploy funds at a significantly more competitive cost than our competitors. We don’t have to rely ultimately on the bonds market, for example, which tend to be more impacted by interest rate fluctuations, and this means our cost of funds is more stable and predictable, and ultimately cheaper. That means we can pay a little more for a portfolio if we choose to and be very ‘opportunistic’ in what we buy and more agile in our execution.”
Martin Cole, Hoist Finance UK Head of Finance, agrees: “Our lower cost of capital means we can invest at a similar price and still be more profitable than the competition.”
An entrepreneurial culture
Such flexibility reflects the almost-entrepreneurial culture of the business. Ed says it’s like being a start-up, but with the advantage of already having an established reputation and benefited from the lessons of the past: “We understand the importance of protecting our clients’ reputations and being a safe pair of hands, while giving the sellers an opportunity of significantly improving their capital ratios and future lending ability,” he adds.
Part of Hoist Finance UK strengths rests in the quality of its people. The investment team, legal counsel, and commercial and operational teams are co-located at its new offices in Media City, Salford, which helps streamline communications. Their combined experience and depth of knowledge brings even further confidence and authority to their decision making.
The established relationships with industry peers do not mean it is not actively seeking other partners: “We are both looking to grow our existing partnerships and diversify further,” he explains, “working with others who may bring the additional skills needed to manage different asset classes, and who share our ambitions for the future.”
In charge of current and future third-party relationships is Head of Outsourced Operations UK, James Rocke. His experience of working with the very best FCA-authorised DCAs in servicing the debt Hoist buys will be critical: “We will very definitely be about working in partnership with our current and future service providers and looking for their help in determining the appropriate collections strategies,” he says. “We will also seek to engage with the wider DCA community as the business grows, including those who, like ourselves, are industry disruptors.”
New market opportunities
In terms of the market itself, neither Ed nor the wider team expect the flood of NPLs that had been predicted in certain quarters, but he does expect new sellers to come to market: “There will be lenders, including some of the challenger banks, coming to the market for the first time,” he says, “and for a buyer like Hoist Finance, who can deploy funds at scale, this is an exciting opportunity.”
Ed says the business can also be flexible. Hoist Finance UK envisages it will continue to target the Tier One and Tier Two banks and lenders, but also explore the secondary market, buying debt from other sellers who may wish to divest: “We are very open-minded about creating new partnerships and co-investing in portfolios that gives us the returns we are looking for,” he says.
Adam agrees: “We’re open to working with our peers and on complex transactions, providing advisory support to banks, for example, in how to best manage their NPL capital constraints. We’re keen to invest in the UK and very much open for business.”
