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The investment bank has increased its funding commitment to the AB CarVal-backed lender as Quantum looks to expand its lending capacity.
Goldman Sachs has increased its commitment to Quantum Development Finance, a specialist lender which issues development loans to UK small and medium enterprise housebuilders.
The asset-backed finance and lending team, which is part of the Wall Street firm’s investment banking division, has agreed to provide a further £500 million ($665 million; €575 million) of funding, expanding an original £200 million commitment it made in early 2025, Quantum said on October 1.
The additional commitment comes three years after the launch of the London-headquartered lender. Since inception, the firm has originated £1.3 billion of development and short-term loans and Oliver Thompson, Quantum’s chief executive officer and co-founder, said the expanded partnership will allow it to increase lending capacity and broaden its product range.
“Widening the scope of what we can lend against was always a key part of our growth strategy, and adding operational real estate loans to our product range complements the deep relationships we have built with our clients over several years,” he added.
Quantum’s loan book largely consists of £5 million to £10 million facilities to regional housebuilders, but the firm has the capacity to support borrowers on larger transactions, up to around £35 million. Goldman’s commitment comes as large financial institutions continue to provide funding to specialist non-bank lenders despite a challenging backdrop for UK residential development.
Quantum focuses on development loans to SME housebuilders, a segment where access to funding remains more constrained than for larger developers. Quantum’s model combines equity backing from AB CarVal, the alternative investment manager now owned by Alliance Bernstein, which remains the majority owner of the platform, with funding from Goldman Sachs, enabling the lender to originate and manage development loans without relying on bank deposits.
The investment bank’s additional funding also provides scope for the lender to offer adjacent products to existing borrowers. These include purpose-built student accommodation, build-to-rent, stabilization lending and investment lending.
However, Thompson characterised the move as a natural extension of existing client relationships rather than a strategic shift.
“A number of our clients already specialize in build-to-rent and PBSA, for instance,” he said. “Stabilization and investment lending also diversify the duration profile of our loan book, and allow us to refinance borrowers onto longer-term products, rather than seeing them move to another lender once their development is finished.”
Thompson said the business has prioritized building a loan book centered on repeat borrowers, adding:
“From inception, we built the business with bank-level operational rigour, but we’ve never lost sight of the client. We designed our lending model with borrowers in mind because repeat, direct-to-borrower relationships typically correlate with higher-quality credit risk. That combination of discipline and borrower focus is what underpins the strength of our book today.”
The lender has received around £20 billion of lending enquiries since 2023.
“We reject roughly 65 percent of opportunities early in the process, as we’re determined to maintain underwriting discipline and credit quality,” Thompson added.
Thompson co-founded Quantum with Rebecca Murphy and Chris Proud. The trio previously worked at Paragon Development Finance and at Titlestone Property Finance, the development lender originally backed by Oaktree Capital Management that Paragon Banking Group acquired for £50 million in 2018.
The founders left Paragon in 2022, intending to establish a new specialist lender. Initial backing plans fell through after a prospective high-net-worth investor died shortly before launch, prompting the team to seek alternative capital partners during a difficult fundraising environment.
“It was a challenging period. We were raising capital to start the business at the same time as Liz Truss’s mini-Budget, which created one of the most turbulent markets in years. We were fortunate to have worked with AB CarVal previously and that existing relationship and trust counted for a lot.”
The lender expects to originate around £500 million of loans this year, according to Thompson, although activity has been somewhat tempered by market uncertainty following the conflict between Israel and Iran.
