, Finance Committee
Financial Transactions Capital: Evidence session 1
Rhianon, I took over there. And even Mike's got his hand up now, so I don't know—
, Finance Committee
Financial Transactions Capital: Evidence session 1
So, you're doing some mezzanine financing with that type of—
, Finance Committee
Financial Transactions Capital: Evidence session 1
And what is your minimum and maximum loan size?
, Finance Committee
Financial Transactions Capital: Evidence session 1
And what's your average?
, Finance Committee
Financial Transactions Capital: Evidence session 1
Sorry, just on some of those higher risk elements, do you then take—? Obviously, you might take a slightly larger equity stake or you might increase the interest rate. Do you secure any of that against assets at all, or against property?
, Finance Committee
Financial Transactions Capital: Evidence session 1
Fair enough.
, Finance Committee
Financial Transactions Capital: Evidence session 1
Who does that?
, Finance Committee
Financial Transactions Capital: Evidence session 1
The source, where it comes from. Okay. Thank you very much. I'm going to bring Rhianon Passmore in with some questions now. Rhianon, over to you.
, Finance Committee
Financial Transactions Capital: Evidence session 1
Is the FTC—sorry, yes. But are people aware of that? Are your customers aware of that, and therefore they understand? They might not understand the intricacies of FTC, but they understand that the money—.
, Finance Committee
Financial Transactions Capital: Evidence session 1
Does the transparency around that it is Government funds—? Sixty-five per cent of your business is Government funds coming in. Is that transparency there for the people you're lending to so that they—
, Finance Committee
Financial Transactions Capital: Evidence session 1
Because why come to you if they can go to a high-street bank and get better commercial terms, I suppose?
, Finance Committee
Financial Transactions Capital: Evidence session 1
And those interest margins or terms, are they comparable to high-street banks, or do you price for risk, because—?
, Finance Committee
Financial Transactions Capital: Evidence session 1
So, there is an ethical lending test—
, Finance Committee
Financial Transactions Capital: Evidence session 1
I'll move on to Rhianon in a second, now, to ask some questions. So, what criteria do the individual organisations have to fulfil to get into some of these funds? So, I suppose, the restrictions on the fund are probably tighter than they would be for FTC, to…
, Finance Committee
Financial Transactions Capital: Evidence session 1
Mike Hedges wanted to come in, so you might need to—. There you are—you're unmuted, Mike.
, Finance Committee
Financial Transactions Capital: Evidence session 1
Because you're working on tranches and you're working on recycling.
, Finance Committee
Financial Transactions Capital: Evidence session 1
And then, from a loan profile, what size of loan do you target? I know you've got 25 funds, so you'll have lots of different things, but your average loan size as loan-to-value ratio if it's secured, and what sort of margin are you looking at?
, Finance Committee
Financial Transactions Capital: Evidence session 1
And then, obviously, we've been doing a little bit of research on how FTC works, and there are certain guidelines as to what can be used and what they can be used for and not. How does that form part of your marketing? Or how do you with your business…
, Finance Committee
Financial Transactions Capital: Evidence session 1
So, there's a mix there.
, Finance Committee
Financial Transactions Capital: Evidence session 1
So, just for me to understand, does all your funding come from Welsh Government through this means, or do you have other funds that you manage? Where does the rest of your portfolio come from?
, Finance Committee
Financial Transactions Capital: Evidence session 1
Okay, well thank you for that brief outline, and I'm sure we'll tease out some of this as we're going through. So, when you're talking to your clients out in the Welsh economy, how easily is FTC understood, and how are you promoting it? Do you talk about it…
, Finance Committee
Financial Transactions Capital: Evidence session 1
Wonderful. Thank you very much. Diolch yn fawr iawn for coming in. We've decided to do this financial transactions capital one-day inquiry just to try and understand a bit more about the positives and the negatives and how it's used, and how Government…
, Finance Committee
Financial Transactions Capital: Evidence session 1
Thank you very much.
, Finance Committee
Financial Transactions Capital: Evidence session 1
So, we'll move on to our fourth item this morning. It's our first evidence session on financial transactions capital—that interesting beast that is within Welsh Government funding. So, we're very grateful to the Development Bank of Wales for coming in. As our…
, Finance Committee
Papers to note
I would just like to start with the papers to note. Could we note the papers to note? Is everyone agreed on that? Great, thank you very much.
