Luigi Wewege is the founder of Vivier Group and CEO of its Auckland based financial services arm Vivier & Co. Luigi explains to inspirery.com how the idea for the company came about and discusses certain invaluable lessons learnt along the way.
How did you get started? What sparked this business idea?
The Global Credit Crunch had relatively little effect on the New Zealand banking sector. In part, this fortunate stability was a result of the health of the country’s financial market and lending sector, which always faced much sterner regulation and control than many other countries during the boom years between 2002 and 2007.
For such reasons, since the 1990s, New Zealand has been the destination of choice for global investors, who have been well rewarded for their faith. Particularly, those from countries such as Japan and China, who flocked to place their household savings in New Zealand, have since received interest rates well above their domestic offerings.
It became apparent to me in late 2013 that many global investors wanted to enjoy the attractive rates offered from New Zealand, without exposing themselves to exchange rate risk and thus the idea for Vivier Group was born.
How do you make money?
Vivier & Co generates interest income from lending on home loans and property development. The former is typically represented by first charge mortgages on residential property, whilst the latter typically takes the form of first or second charges over residential projects with existing planning permission.
How long did it take to get your business into the black?
In fact not very long at all and Vivier & Co has the advantage of a lean internal expenditure structure, with mainly direct costs and minimal overheads in New Zealand and elsewhere. Our borrowers often operate a similar cost model. In this way, Vivier & Co is able to grow deposits significantly, to maintain relatively static fixed costs and thus to predict its income with a high degree of accuracy.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
Yes some years ago, the New Zealand Government withdrew their deposit guarantee scheme for all banks and financial institutions. Other government schemes typically offer low levels of cover. Nevertheless, we worked hard to find alternative ways of protecting client funds. We now maintain an insurance policy with Standard and Poor’s top rated insurers, providing a far higher limit of indemnity.
How did you get your first customer?
Once we went live, it didn’t take very long for word to spread of our rates being higher than retail banks and to receive our first customers. The reason for this is that the larger high street banks had governments provide ample funds at low rates to them to encourage lending. Thus retail banks do not require deposits from savers and so are not paying reasonable interest rates.
This interview first appeared on inspirery.com and you may find the remainder of the interview here: http://inspirery.com/luigi-wewege
About Inspirery:
Inspirery.com was launched in 2014, as a place where entrepreneurs all over the world could tell their story: how they started, what challenges they face, and how they are successfully marketing themselves.
About Vivier Group:
Vivier Group is the global umbrella organisation of the Auckland based Vivier & Co and Vivier Investments, the London based Vivier Developments & Vivier Home Loans, and the Dublin based Vivier Mortgages.
For more information please contact: press@viviergroup.com
