The management of non-conforming lender Preferred Mortgages have bought the company from its American owners, Rotch Property Group, in a deal worth £270m.
The management buy out is the culmination of several years’ work by Preferred to improve its infrastructure and distribution network. Rotch Property Group are specialists in the commercial market and had always planned to reduce their involvement with the lender, however they will retain a small stake. As part of the buy out, Preferred has strengthened its management team significantly, but American chief executive Dennis Pitocco, who led the buy out, will remain in charge.
The move was backed by the investment banking division of the Barclays Group, Barclays Private Equity (BPE), and has taken over six months to complete.
Owen Clarke, director at BPE, said: ‘We believe that Preferred is a highly attractive and stable player in the market due to its underwriting capabilities, in-house servicing and its strong reputation for high quality service. These factors, along with the management team who have many years of experience in this sector both in the UK and US put Preferred in a strong position to capitalise on new business in the future.’
John Webster, business development director at Preferred Mortgages, said: ‘We are committed to updating our systems and with this backing we can now push ahead. There should be no real change for intermediaries and consumers except for the distribution strategy where they will see a better service than we already give.
‘In the longer term we expect to grow significantly. The non-conforming market is still expanding, and now with a good solid base there is something that we too can expand from. We expect to grow much faster in the future than we have previously done.’