How do you innovate when you aren’t quite sure where to start? This is a question currently at the forefront of the minds of many a real estate company. There is a huge difference between a reticence to change and a nervousness around making the right changes in the noisy, fast-moving world of digital transformation.
It is a challenge Beaufort Capital is all too familiar with. A boutique, Knightsbridge-based finance company might not instantly strike people as the type of business where tech innovation and education are being woven into the wider corporate structure, but they would be wrong.
“We’re not entirely sure where the sector is going next in terms of tech,” says managing director of UK real estate finance Mark Quigley. “But we’re trying to get a handle on it, move with the times and stay in tune with what our clients are trying to do. We need to understand the challenges they are facing.”
“I would rather be prepared to put myself out there and try to educate myself”
As is the case for many other companies and individuals who have been operating in finance and real estate for a number of years – Quigley was at Barclays for three decades before joining Beaufort – knowing what to focus on and how best to support clients in an ever-changing tech environment is no mean feat. But it can be done.
Here Quigley explains how risking occasional “ridicule” in his staunch commitment not to ignore tech advancements is by far the best, and most business-savvy, approach to navigating the “new world”. Founded in 2013, Beaufort Capital provides mezzanine finance and equity investment across all asset classes in England, Scotland and Wales.
Originally set up to support property developers following the credit crunch, the firm has taken a forward-thinking view since its conception. “Back in 2013 a lot of lenders had run to the hills,” says Quigley. “There was an opportunity for firms like us who were prepared to back people with good, sensible ideas because we took the view that property in this country remained a very good and solid asset class.”
That opinion, he says, remains the case, but being properly equipped to support the sector now requires an increasingly in-depth knowledge of how it is being, and will continue to be, impacted by technology.
“We want to be in a position where we can make better assessments of what future tenants would want,” he says. “For example, if we’re financing an office building, it’s one thing to make sure it’s in the right location with the right spec. But the right spec now doesn’t just include the floor plates and the space, but all the digital advances and tech aspects, too. We’ve been looking at this for the last couple of years.”
Transforming with the times
It was around two years ago, he adds, when he first started to realise just how important it was for lenders to fully appreciate the power of digital transformation. “I was at a seminar where there was a segment on automated vehicles. There were a lot of middle-aged men and women in the audience and the speaker said ‘I can see a lot of you are of an age where your children are probably about to learn to drive. But here’s the thing. The chances are that their children never will, because in the new world people will just have driverless cars and Uber will turn up to pick up the children and take them wherever they want to go. They will never have to learn that skill of driving.’”
That, says Quigley, was his lightbulb moment. “It got me thinking that in a world without car ownership, perhaps we won’t need driveways or garages, and houses will be different. “It snowballed from there as the realisation grew in my mind that technology will change everything so much in the way we build our future houses, offices and buildings. So that’s really what we are trying to understand properly so we can best help and support our clients.”
Quigley is quick to contextualise Beaufort’s current position on tech in terms of the wider industry – “it would be overstating it to say we are ahead of the curve” – but adds that the company has gone beyond talk and is now focused on action.
“We’re trying to move with the times and stay in tune with our clients”
With an emphasis on education and thought leadership, the company has started to host internal events on subjects including artificial intelligence and drone technology. “People have said ‘we want to learn about these subjects, and we want to understand them more,’ which makes me think these issues are very much on people’s radars now in a way they weren’t 12 months ago. And the key is that it starts and ends with what our clients are doing and what they want to do with their future developments.”
Taking ownership
The learning process is certainly not without its challenges though. Whether for individuals, companies or entire sectors, change can be difficult to manage, even when it ultimately paves the way for a shiny, new future.
“There are so many clear benefits to change,” says Quigley. “But trying to bring everyone on the journey at the same time can be difficult as people are at different stages.” But, he adds, where there is a willingness to move forward, there is most certainly a way. “I sit in an office where I’m the oldest member of the team and the younger members are very keen to point out my shortcomings when it comes to matters of technology,” he laughs. “But I also know they recognise that I am trying to move with the times and that actually goes a long way.”
He adds that he is in a “twilight period” where he could probably just about get away with ignoring the whole tech thing completely. “If I did that, though, I would never move forward or develop, so I have chosen not to do that. It has meant putting myself out there and getting the occasional ridicule, but that really doesn’t bother me. I would rather be prepared to put myself out there and try to educate myself.”
The other thing that Beaufort has on its side is the support of the whole company, something that is arguably easier to achieve as part of a smaller, boutique firm. “The owners of the business are hugely supportive,” says Quigley. “They want us to move forward and grasp these opportunities as they come along. But then we are a comparably small company. The largest part of my career was at Barclays Bank.
“That was such an enormous organisation where change then did become a challenge. When a company is that big you are more likely to get people who opt out and say ‘no, I’m happy to do what I do, and I don’t really want to move forward in the new world’. I’m not just singling out bankers here. There are large companies in the same boat with multi-generational issues.
“Going back to Beaufort, we’re very much trying to move forward. We want to understand the challenges the whole world is facing but through the lens of being financiers in property. We want to find and meet property developers who are looking to do the same, and we want to support them.”
To see more on Beaufort Capital’s AI breakfast event, watch Andrew Baum’s keynote speech here
To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette
