Eugene Esterkin, MD of Affirmative Finance
1. Right, so who do you fancy off the telly?
Off the telly!? I don’t really watch much telly but I would love to meet with Julia Roberts. Apart from fancying the pants of her in Notting Hill and Pretty Woman she seems interesting when interviewed. Do not fancy them but again would love to meet both Richard Gere, Jack Nicholson and Anthony Hopkins simply because I love their films consistently!
2. When did you start Affirmative Finance and what were you doing before that?
I stated Affirmative in April, 2004. I was then a solicitor, a lender through UK Mortgage Corporation Ltd, had interests in engineering, property investment and some other areas but finally decided that I wanted to pursue fewer rather than more interests. Whilst Law is a business as well as a profession, it is dry and rarely exciting. I had always been involved in different businesses and was then, as I am today, a specialist as a lawyer in consumer credit and commercial finance. Since I was already involved as a lender predominantly in short term lending, the transition was most logical and natural.
Sidney Cohen, then at Cheval, asked me if I would undertake legal work for Cheval in the middle of 2003. I went to see him in Stanmore and he offered me a serious amount of work for my firm. My brother was a lawyer at that time but he had migrated to the family property business and he at the same time as I met with Sidney wanted me to join him in that business. He said, “Being a lawyer is soul destroying, come join me.” I knew he was right about the law but I could not really add anything to that business, since he had it well under control. I replied, “You don’t need me”.
I thought and thought about the Cheval offer and then, driving home in my car, I stopped for a sandwich and asked myself if I really wanted to be a lawyer for the next 20 years - in hindsight I was probably having a mini mid-life crisis! I rang my wife and told her to tighten her belt since I was about to dump almost £2M of legal fees when I stopped acting for lenders and started competing with them and said that we might be in for a bumpy ride financially....but I had to do it!. I got back to the office and told Gary [Gary Lederberg of Affirmative] that I was leaving the firm [Boote Edgar Esterkin] he said he’d join me... I did not leave the firm but started Affirmative as well and the rest is history!
3. Wow, OK, so what did you want to be when you were a kid? A lawyer?
No, not at all, I wanted to be a veterinary surgeon. I’ve adored animals from an early age and wanted to be a vet. Unfortunately I was lousy at science – despite my mother and most of her family being chemists or doctors and my grandfather being a vet, no one could get me to understand all those symbols and concepts – but then my father was a Russian diamond merchant so I’ve come from a variety of disciplines!
4. What would you be doing now if you weren’t at Affirmative?
I would be working in property with my brother. That, or living in a kibbutz in Israel which I did when I was in university for a few months and found it very peaceful and rewarding. After being there for a week the manager of the Kibbutz factory, which made water filtration systems asked me to come up with some ideas on their production line. 6 weeks later I left and efficiencies had increased by 13%. That business is now a world leader in its field......need I say more?
5. What’s the best thing and the worst thing about your job?
Freedom. Every lawyer says “the job would be great but for the clients”. They feel locked in! At Affirmative I have freedom. Freedom to decide, to act; freedom to get out and about, those are the best things. In the last seven years I’ve seen more of the country than I have in the rest of my whole life and that’s what I am passionate about really. Meeting people is the most important thing in this world; we were not put here to sit and stare at the four walls of an office all day.
It’s exceptionally rewarding to go out, meet people, and then to help them. The relief you see on people’s faces when you tell them you can help them after they’ve been refused credit everywhere else is wonderful. Making money is a pleasant by-product of creating a meaningful and professional business. Making and amassing money is not all that hard; what you do with it is the thing that counts.
The worst thing in our industry is that so many applications are bent. Having to assume every single application is a potential fraud questions your faith in humanity... There is no room for rogue and immoral participants in this industry and the drive of the FSA in curbing fraud is spot on the mark in my opinion!
6. What trends have you noticed within the bridging industry over the last 12 months?
The only trend I’ve noticed is that there is no trend. The market is too unstable, too unreliable, banks won’t make decisions and each time we think a constant is emerging it becomes reversed. But, that said, there are more people moving into the industry, looking at getting into lending, and more have moved into bridging over the last 12 months than in the previous 2 years. That is a good thing for our industry.
But, for every new lender there seems to be also a failure, so the market is remaining constant – as one leaves a new one comes in. Their arrival is good, it’s good to have competition, it drives forward quality and efficiency and provides more choice for the consumer.
7. What trends do you predict within the industry over the next 12 months?
More of the same. The economy could worsen; the decisions made by our government over the next three to six months are vital. If they get it right we may be able to start climbing the massive hill... but then we’re still subject to a global economy, as well as environmental factors that are entirely out of our control – who could have predicted the snow this winter or the ash cloud? The BP oil leak is just one more example of how fragile our position has become - who could have predicted that off shore drilling would affect the UK pensioner so deeply?
That fragility is because England is devoid of manufacturing; we simply do not manufacture any more, we are thus very susceptible to the impact of the global economy. Service industries are all very well but they are not about wealth creation. Manufacturing and production are about wealth and job creation. We need to get back to basics in the UK. Without that this country will remain 2nd tier. My fear is that we will not!
8. What’s your favourite film? And if your life was a TV show what would it be?
My favourite film is A Few Good Men. TV show? Wait Till Your Father Gets Home (for those who are old enough to remember it), because my wife always says it to the kids and the dogs!!
9. What’s your favourite book and why?
Books? The Count of Monte Cristo and Nicholas Nickleby. They’re both stories of hope and are immensely detailed. That’s what I love about Dickens in particular; by the end of his novels you know each character completely. Their lives have been so finely woven into the narrative that everything that happens to them is revealed , there’s no room for questions, no open endings, I like closure.
10. If you could have a super power for one day what would it be and why?
There’s only one thing the world really needs and that is the power to control fundamentalism and bring to an end the strife in the Middle East. The harm that conflict is causing is more damaging than most people realise. We need to end fundamentalism and create peace between the Israelis and the Arabs, and bring to an end the East and West divide between cultures. Add to that power the ability to understand Farsi, (which I am learning), without all the time it is taking and I would be a happy man...well at least for one day!
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