M&G has bought a 41% stake in Ireland’s largest non-bank lender, Finance Ireland.
The deal was on behalf of the £143bn Prudential With Profits Fund and external client funds managed by M&G Investments.
Finance Ireland provides residential mortgages and loans to commercial property, as well as car finance, leasing, SME financing and lending to the agricultural sector. Last year its lending figure passed €1bn for the first time as it raised €50m to underpin future lending growth and expansion.
Finance Ireland, founded in 2002 by chief executive Billy Kane, expanded into the residential mortgage market in 2018 with the aid of M&G, which purchased around €1bn of these mortgages in the past three years. Last year, the company introduced long-dated fixed-rate mortgages with terms of up to 25 years, supported by an existing funding agreement with M&G Investments.
Kane said: “M&G know our business well as funders of our residential mortgage book and we are delighted that they have taken this step to take a substantial equity position in our business at this time. The timing is also significant given the exit of Ulster Bank and KBC from the market as customers look for a new provider for their mortgage and for their business financing.”
The investment is managed by M&G’s dedicated speciality finance and consumer loans team, which was formed in 2017 and is part of the firm’s £72bn private and alternative assets division.
Will Nicoll, the division’s chief investment officer, said: “Finance Ireland is the largest non-bank lender within the Irish market and is well positioned to take advantage of favourable structural changes as some banks withdraw for core areas of lending. In addition to the growth potential of the business, the investment provides us with long-term funding opportunities as we continue to partner with the team to bring innovative financing solutions to Irish businesses and consumers.”
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