Successfully navigating extreme market fluctuations stemming from unprecedented global events is no small feat. Doing it twice is downright impressive. Flexibility coupled with innovation lies at the heart of everything that Eric Abramovich and the team at Roc Capital do to continue growing and scaling their company even when conditions are far from ideal. Originate Report went straight to the source to get an insider’s view of the company’s unique business model and how it allowed them to thrive in even the most challenging times—ranging from the dynamic environment of the initial COVID-19 pandemic to the current environment in the real estate and lending industries.
Instilling Organizational Stability
Dependable access to stable capital is an essential component of sustainable lending. Issues arise, however, when organizations are overly reliant on leverage to meet return target thresholds and lack a sufficiently diversified group of investors. Abramovich and the other co-founders recognized early on how essential this concept is to long-term viability and structured the business model accordingly. “We are always preoccupied about mitigating risk whenever possible and building in organizational practices such as expanded access to unleveraged capital has allowed us to be flexible even in a dislocated market,” he says. This proactive approach allowed Roc Capital to continue lending operations amidst the fallout of the COVID-19 pandemic and allowed them to adapt to the current evolving marketplace. Abramovich explains how the company maintained consistent access to unleveraged funds to set themselves apart from the competition: “We did not have any margin calls. We were unlevered. We had committed insurance capital entirely insulated from the rampant market volatility that enabled us to not just see the crisis through—but continue delivering optimal results for our client base.”
The global pandemic surprisingly functioned as an accelerant for Roc Capital’s business initiations, driving fundamental shifts in where and how the company invests and lends in a collective effort to deliver the best end-product to the customer. It has been a landmark developmental phase for Roc Capital. At a time when most lenders were forced to pause or completely shut down operations altogether, Abramovich and his team closed a record number of loans, started a title company and AMC, and released a cutting-edge white label portal which is now widely available, in service of the 360 concept for their growing list of satisfied clients. Roc Capital also significantly expanded their product offerings, primarily on the DSCR side, and now have a full range of short-to-long-term loans that cover all housing from single family to condos to multifamily buildings.
Roc Capital’s founders’ experience in capital markets, diversified capital, and focus on managing risk have them strongly positioned to work with originators to create new lending opportunities and continuing to lend in a period of dislocation. Their white label table funding business model is appealing because it protects originators from the severe market moves that are currently playing out while protecting their brand identity.
Data-Driven Risk Mitigation
It is hard to overstate the importance of a thorough data analysis protocol when making informed business decisions. Objective statistical information is a powerful tool utilized to gain a powerful competitive edge by enhancing the effectiveness of loan products and providing more accurate insights to clientele who depend on experienced professionals to provide actionable insights and advice. “First and foremost, we are a data science-driven company. We have many full-time, highly qualified data scientists on staff whose sole responsibility is interpreting market data and translating it into useful insights,” Abramovich explains. “I believe where we add value most for our clients using this data-centric approach is first accurately forecasting the inherent risk profile of a given transaction and then use that information to create new products that assist our originators with their daily tasks—whether that is generating more leads, increasing their workflow to be more efficient, or handling more of their administrative processes.”
Corporate Culture Breeds Success
Abramovich prides himself on playing a largely hands-on role in the day-to-day operations at Roc Capital. “We are a 100% employee-owned company, and the founders are always around,” he emphasizes. “My fellow founders and I are obsessed with completing each transaction as smoothly and efficiently as possible for the client. Our clients know that, and we ensure they get the best service possible.” This team-centered environment has been a key driving force behind Roc Capital’s exponential growth into one of the premier lending organizations today. The leadership team has implemented a unique approach to foster a tight-knit, collaborative workplace. “We essentially have a flat organization,” Abramovich states. “We all sit together in a trading floor type of setup. Nobody has a private office; it is a highly collaborative endeavor.”
One thing is for sure: whatever Roc Capital is doing, it is producing consistent results. The future is bright for Roc Capital as they plan to continue to consistently integrate technology into their business model to enhance client experience while leading with a steady hand. Roc Capital will remain consistent and reliable throughout these headwinds.