Steve Trowern

Co-Founder and Managing Partner, MCM Capital Partners/Temple View Capital

Why did you choose Private Lending?

I have spent the last 20 years exploring opportunities where markets are dislocated or where traditional market participants, in this case, banks, are not adequately addressing the market’s needs. “Private Lending” is an antiquated term as the sector has become more institutionalized. Nonbank Investor Financing is probably a more appropriate reflection of the sector today.

What is your current role and what do you do day to day?

My partner and I oversee the entire MCM platform, including our BPL originator, Temple View Capital. That includes all major decisions, relations with our investors and credit providers, ensuring the integrity of our capital structure, product design and pricing, and policies and procedures.

What excites you about your role today?

We meet and approve every single candidate before hiring. That fosters a small, close-knit family environment that makes coming into a physical office fun and interesting.

Can you explain a time where you faced adversity or had struggles early on in your career? Where did it all begin? How did these experiences mold and shape you into the leader you are today?

When have we not faced adversity? Since founding MCM in 2007, we have faced a global financial meltdown, periods of incredible market volatility, and a global pandemic. Each of these, however, has made us stronger. You must prepare for the 100-year event as though it will happen this year, and often does.

Is there anything that you wish you could go back and tell yourself at the beginning of your career?

I spent the first half of my career working for large institutions. In hindsight, I wish I had transitioned into being an entrepreneur sooner. There is no better bet than betting on yourself.

Who is someone that has had a significant effect on your career and why?

I had a managing director I worked for early on in my career. He was a very unlikeable character – we called him Niedermeyer after the Animal House character who was killed by his own troops in Vietnam. However, he was a magnificent teacher. Attention to detail is as important as vision and the difference between great and extraordinary is only 10% more effort. Always put in the final 10%.

What has been your favorite aspect of being in private lending over the years?

I would say creating new products and developing innovative solutions to our clients’ problems. Regular mortgage banking has Fannie and Freddie to rely on for liquidity and standards. Private lending, or what should be called Nonbank Investor Financing, has been made up as we have gone along. That is just more interesting.

What would you consider to be the highlight of your career thus far?

The fact that we are one of the only, perhaps the only, top-tier private lender who remains independent. That may not always be the case but building Temple View from scratch, without the support of a sponsor, is our proudest accomplishment.

What do you enjoy most about your job?

Least? I enjoy the daily challenge of having to adjust our sails and tack to stay ahead of our peers. I do not particularly enjoy the impact of events that are out of our control, such as inflation, wars, and dislocations in credit markets. In times of market volatility, it is easy to forget that our customers are the ones really creating value by taking old housing stock and making it new again. It is not a trade for most of them. They are professional investors and will keep going whether rates rise or fall. It is a calling for many of them.

Is time or money more valuable and why?

Well, it is difficult to deposit time into your bank account, but time is more valuable. It is finite for all of us. Money is not.

How do you make sure your company stays ahead in this industry?

It is difficult to predict with any degree of certainty in this industry, so you need to be flexible enough to adjust quickly to changing conditions. We do not get too attached to one way of doing things.

What tools do you use to aid you in your role to be most efficient, organized, and focused?

Information and communication are key. I have a wide range of contacts from the fixed income community to contractors on the ground. Listen to everyone, embrace new ways of doing things, and be self-critical. It is constant evolution.

Has your role changed significantly to address the current environment?

I am certainly spending more time on capital, pricing, and liquidity considering recent market conditions. However, the role will change again just as quickly. There is always something on the horizon.

What advice would you give to someone who has just started out in private lending?

Build bridges, work with people you like, and do not single source anything, particularly capital or financing.

How will private lending change to adapt to the current market trends?

We are starting to see fundamental changes in the market already. The business has significant exposure to the securitization market, particularly among the aggregators, and that has brought some serious challenges to the gain-on-sale originators. I think we will see a shift to balance sheet lenders and some consolidation in the industry. Over the longer term, traditional residential mortgage platforms will look to diversify product offerings by acquiring BPL lenders. They are much easier to buy than to create in-house.