Pivotal Growth makes fourth acquisition with The Buy to Let Broker
The Buy to Let Broker was launched in 2013 by Matt Hardman and Matthew Rowne, with around 26 employees, making it one of the largest specialist buy-to-let mortgage brokers in the UK.
It covers a wide range of buy-to-let business including remortgage, high value loans, first-time landlords, rate switch, limited company, houses in multiple occupation (HMO), multi-unit freehold blocks and holiday let.
The firm also does bridging finance with rates starting from 0.45 per cent, as well as insurance and protection.
Pivotal Growth said the acquisition expanded its capability in the specialist buy-to-let market. It added that it was currently in “active discussions” with a number of other opportunities to “build on the momentum of the group’s buy and build strategy, expanding its product set and geographical reach”.
So far, the firm has acquired Hemel Hempstead-based specialist mortgage broker The Loan Partnership, Scottish mortgage broker Lifetime Finance Group and Northampton-based new build specialist Grange Mortgage and Protection Services.
Pivotal Growth launched last year as part of £200m joint venture between LSL Property Services and Pollen Street Capital.
Former chairman of LSL, Simon Embley, leads the firm and aims to create a national mortgage adviser led by technology, high quality regulatory compliance and customer service.
Embley said: “I am delighted to welcome The Buy to Let Broker into the Pivotal Growth group. This acquisition will provide us with specialist expertise in the buy-to-let market, further building on our existing specialist broking capabilities.
“Matthew and Matt have built a fantastic business with an excellent reputation, and I am excited to be working with them and their team to continue to deliver first class solutions to landlords.”
Hardman added: “We are without doubt, extremely proud and privileged to be a part of the Pivotal Growth stable. Working alongside likeminded people, who share the same passion, integrity and drive as ourselves has long been our modus operandi and we can honestly say that we have found a united partner to continue to drive the right advice and solutions to landlords UK wide, whilst continuing to scale the business and retaining those core values.
“Collaboration has always been at the heart of everything we do – and we very much look forward to working with Simon and the team at Pivotal.”
Pivotal Growth makes third acquisition with The Loan Partnership
The firm was founded in 2014 by John Webb and Andy Pelley, and focuses on second charge and bridging finance.
The pair have over 40 years’ experience in the sector and has around 26 employees, according to LinkedIn.
Pivotal said that the acquisition expanded its capability into second charge and bridging, and that it was in “active discussions” with several other potential opportunities that would “continue to build on the group’s product set and geographic presence”.
This marks the third acquisition by Pivotal Growth, which was launched last year as part of a £200m joint venture between LSL Property Services and investors Pollen Street Capital.
It is led by Simon Embley, former chairman of LSL and aims to create a national mortgage adviser fuelled by technology, along with high quality regulatory compliance and customer service.
Its other acquisitions include Scottish mortgage broker Lifetime Finance Group and Northampton-based new build specialist Grange Mortgage and Protection Services.
Embley said that he was delighted to welcome The Loan Partnership to the group and it would complement its existing business and build out its specialist broker capability and give them a presence in the second charge and bridging market.
“We believe these segments will play an important role in supporting customers looking for access to alternative mortgage financing solutions. We are excited to be working with John, Andy, its management team and people, who are renowned for providing fantastic service, and excellent customer outcomes,” he said.
Webb said that Pivotal was the “perfect partner” for the firm and was looking forward to working with them to grow its business.
“Pivotal Growth will give The Loan Partnership access to a wider customer base due to its expansive distribution reach and access to capital and technology, which is increasingly important to provide our clients with the best possible service and address the needs of all stakeholders we support in the second charge and bridging sectors. We look to the future now with even more confidence as part of the Pivotal family,” he added.
Pivotal Growth makes second acquisition with Grange Mortgage and Protection Services
Grange was launched in 2005 by Daniel and Emma Mumford and has grown to 27 members of staff. It specialises in new builds, including Help to Buy and shared ownership, but also offers protection services and other mortgage products.
Pivotal was launched in April last year as part of a £200m joint venture between LSL Property Services and investors Pollen Street Capital.
It aims to build a national mortgage adviser driven by technology, along with high quality regulatory compliance and customer service.
The company made its first acquisition of Lifetime Finance Group in December, which is one of the largest mortgage brokers in Scotland.
Lifetime Finance’s brands include Aberdeen Mortgage Company, Lifetime Planning and Super Contractors. The group has a focus on advice for contractors and self-employed clients.
Pivotal said it was in discussions with a “significant number of other potential opportunities”, with a few in due diligence and expected to complete in the near future. It has made at least £200m available for acquisitions.
Simon Embley, chief executive of Pivotal, said: “We see the new-build sector playing an important role in our growth plans and we are particularly excited to be able to work with Dan and his team to develop the business further.”
Daniel Mumford, managing director of Grange, added: “Pivotal Growth is an ideal partner for Grange, and I am looking forward to working with the Pivotal Growth team to continue grow the business.
“We see this investment by Pivotal Growth as an important step for Grange, which will give us access to capital and technology that is becoming increasingly important to address the needs of all stakeholders we support in the dynamic new-build and re-sale sectors.”
Pivotal Growth makes first mortgage firm acquisition
Headquartered in Glasgow, Lifetime Finance Group is one of the largest mortgage brokers in Scotland, with brands including Aberdeen Mortgage Company, Lifetime Planning and Super Contractors.
It has a particular focus on providing advice for contractors and self-employed clients.
Pivotal Growth was launched in April this year as a joint venture broker between LSL Property services and Pollen Street Capital.
The aim is to build a national mortgage adviser powered by technology, with quality regulatory compliance and customer service.
Around £200m will be made available to fund acquisitions, with the firm saying that it expects to complete further transactions in the near future.
Simon Embley, chief executive officer of Pivotal Growth, said: “I am pleased to confirm that Pivotal Growth has successfully concluded the acquisition of Lifetime Finance Group. We are particularly excited to be able to work with Gordon and his team to develop the business further.”
Gordon Hunter, managing director of Lifetime Finance Group, said: “Pivotal Growth is an ideal partner, and I am delighted to be retaining a minority investment in the business, particularly due to the future opportunities that this brings.
“Investment by Pivotal will give us the capital and technology that is becoming increasingly important to be able to satisfy the growing demands of all stakeholders, including, consumers, lenders and the regulator in a fast-moving dynamic market.”
Foxtons looks for buyer for mortgage broker Alexander Hall
Several mortgage advice firms have been approached by third parties acting for Foxtons with marketing packs targeting the acquisition of the Alexander Hall in the last two months.
Mortgage Solutions understands that Clearwater, an adviser brokering the deal for Foxtons, has drawn up a prospectus to show to eligible mortgage advice businesses.
Clearwater is a corporate finance house that specialises in mergers and acquisitions, debt raising and refinancing.
One source, who has been approached with a prospectus but has declined the proposition because they are not planning to expand, said to be an attractive deal the transaction would have to come with a mandate relating to the ongoing relationship between the two businesses.
“Any acquirer of the business would be looking for reassurance that Alexander Hall’s relationship with Foxtons to serve its estate agency branches would continue,” said the source. “Perhaps in the region of a 10-year service agreement.”
One broker firm thought to be an interested party is Pivotal Growth, a new intermediary established as part of a £200m joint venture between LSL and investors Pollen Street Capital.
Simon Embley stepped down as chairman of LSL Property Services to join Pivotal as chief executive in April.
Through funding from LSL and Pollen Street Capital, Pivotal is armed with a war chest of close to £100m to support acquisitions.
Following the publication of Mortgage Solutions’ story, Foxtons confirmed in a statement to the stock exchange that it was reviewing strategic options for Alexander Hall which could include the sale of the business.
Clearwater declined to comment.
LSL said it would not comment on market speculation.
Simon Embley to lead new broker Pivotal Growth as he steps down as LSL chair
The new advice firm has been established as part of a £200m joint venture between LSL and investors Pollen Street Capital.
LSL owns companies in property financial services, surveying and estate agency, including mortgage network Primis, e.surv and Your Move.
The investment in debt and equity will enable Pivotal Growth to acquire other mortgage firms.
Pivotal Growth has entered a long-term arrangement with Primis, and firms acquired in future will be expected to join the network.
LSL has committed up to £33.5m and Pollen Street Capital up to £62.4m to support acquisitions. This will be supplemented by external debt finance in Pivotal Growth, with a view to an exit over three to six years.
LSL and Pollen Street Capital’s investments of £19.1m each will give them a 47.8 per cent equity share of Pivotal Growth.
The additional investment of £14.4m from LSL and £43.3m from Pollen Street Capital will be delivered by way of loan notes.
Embley has won permission from the LSL board to invest £4m into Pivotal Growth for a 4.4 per cent share. He departs as non-executive chairman on 28 April, but will remain on the board as a non-executive director.
Jane Cross, previously chief risk officer of Primis and managing director of E.surv, has been appointed chief operating officer.
David Copland, previously director of mortgage services at LSL, will become strategy and business development director.
LSL chief executive David Stewart, and Ian Gascoigne, partner at Pollen Street Capital, will become directors of Pivotal Growth.
Stewart said: “The launch of Pivotal Growth marks a significant milestone in the implementation of the group’s strategy. It follows other significant steps we have taken to strengthen our management team, and recent acquisitions of Mortgage Gym and Direct Life & Pension Services.
“The Pivotal Growth joint venture with Pollen Street Capital will enable us to establish a leading position in the provision of direct-to-consumer advice and underpins the position of our Primis network.
“I look forward to describing our plans further when we release our preliminary results on 28 April.”
Gascoigne added: “We are highly enthusiastic to support Simon Embley and his team in the launch of Pivotal Growth.
“We believe that Pivotal Growth has potential to quickly become a market leader, while delivering pioneering levels of innovation and the highest standards of customer service in the industry.”
Primis mortgage completions stable and adviser numbers grow
Despite the impact of Covid-19 and lockdown restrictions on the housing market, a strong performance in the first quarter of the year meant the group reported just a small dip in mortgage completions of 0.4 per cent, from £14.7bn reported in H1 2019.
Year on year, LSL’s mortgage network Primis increased its market share of completions from 8.5 per cent to 9.2 per cent. Both its individual adviser numbers and appointed representative (AR) firms have also risen.
Adviser numbers have increased from 2,277 to 2,431 and AR firms have increased from 860 to 896.
The network has already indicated mortgage activity for the summer looks strong.
Primis reported a 20 per cent increase in mortgage applications last month compared to the same period last year and 16 per cent ahead of June, making July its strongest month for new applications.
Group revenues fell 25 per cent year-on-year from £154.1m to £114.9m which LSL said had been impacted by the closure of 164 estate agency branches in February 2019 and the tenant fee ban introduced in June 2019.
Group chairman Simon Embley (pictured) remained upbeat, however, and said he was “increasingly optimistic about market conditions”.
LSL reported an increase in its underlying operating profit from £12.2m in H1 2019 to £12.5m in the first six months of 2020.
However, this does not reflect £2.8m of Covid-19 related net costs and the charging of net exceptional costs of £4.4m.
It also includes £13.8m of financial support claimed through the Coronavirus Job Retention Scheme, which has been used to pay employees on furlough.
Embley said: “I am pleased to confirm that LSL has performed extremely well during a period of unprecedented uncertainty and disruption.
“This is testament to the underlying strength of the group and its ability to respond quickly and effectively to rapidly changing market conditions.
“After a strong first quarter, we reacted decisively to the emergence of the Covid-19 virus, managing our operations and cash position to secure the position of the group even in the event of the lockdown continuing throughout the year.
“This same agility served us well as restrictions eased, as we rebuilt our capability quickly to trade strongly throughout June.”
He added: “Although we remain alert to the risk of more disruption and will take prompt action should it occur, I am increasingly optimistic about market conditions and am confident in our ability to compete successfully.”
LSL’s focus on broker market sees mortgage sales rise 20% year-on-year
In its 2016 full year results, the group said mortgages completed through its financial services division accounted for 7% of overall gross mortgage lending in the market; estimated at £246bn by the Council of Mortgage Lenders.
Some 623 appointed representatives (AR) operate within LSL’s combined mortgage networks, First Complete and Pink Home Loans, making them the second-largest network in the UK. Within these AR firms, there are 1,650 total sellers.
The group bolstered its presence in the mortgage intermediary market with the acquisition of Group First in February. It holds a 65% stake in the mortgage and protection firm.
As the group jostles for a larger share of intermediated mortgage sales, it has taken a noticeable step back from its exposure to the property sales market. In the second half of the year, LSL disposed of its entire shareholding in online property sales portal Zoopla.
LSL chairman Simon Embley (pictured) said after a strong H1 performance in its estate agency division in the run up to the Stamp Duty changes on 1 April, the group took decisive action, following the EU referendum result, to protect its balance sheet. It employed cost-cutting measures, closed estate agency branches and sold its interest in Zoopla, while pausing other acquisition activity.
Profit before tax rose 65% year-on-year from £38.6m to £63.5m after receiving £32.9m from the sale of its Zoopla shares. The group saw a rise in lettings income of 9% and said it plans to monitor the government’s plans to ban letting agent fees, and will contribute to the consultation on the proposal.
Overall, the estate agency division reported a 3% rise in revenue. However, revenue from Marsh & Parsons fell 5% to £33.5m while profits plummeted 36% to £4.4m.
Group chief executive Ian Crabb attributed this to a ‘challenging prime central London market, compounded by the result of the EU referendum which caused transaction levels to drop significantly’. Marsh & Parson’s residential sales transactions dropped 12%.
Looking ahead, Embley said 2017 was likely to see a reduced volume of house purchase transactions compared to last year, with modest house price inflation predicted outside prime central London.
However he added that “mortgage costs and availability remain positive and the medium to longer term fundamentals of the UK housing market remain robust.”
LSL’s CEO Embley steps aside
Ian Crabb will join LSL as group chief executive on 9 September 2013.
Oxford and Harvard-educated Crabb was executive chairman of Learndirect, where he worked closely with Lloyds Development Capital on Learndirect’s growth strategy and before that CEO of international digital entertainment and communications company Quadriga.
According to the London Stock Exchange statement this morning, Embley plans to prioritise a smooth handover to the new group chief executive and maintain focus on the execution of LSL’s existing strategy to continue delivering shareholder value as the market recovers.
Simon Embley told Mortgage Solutions: “This is something I have talked to the board about for a long while. It’s a big decision having spent 12 years in the job but I think we’ve found a CEO who has a great record and I’m delighted with how it has worked out.
“I will continue to manage my 10% holding in the group and recognise that we must preserve and deliver value to shareholders.
“I will still be working full time in the business but will be looking more from a strategic rather than operations role.”
Roger Matthews, chairman, said: “The proposed changes reflect the Board’s desire to implement an orderly succession to a new group chief executive whilst retaining Simon’s significant knowledge of the residential property market and, in particular, maintaining key client and industry relationships. The business is in a strong position to deliver shareholder value and to embark on the next phase of its development as the market recovers.”
Ian Crabb, said: “I am delighted to be joining LSL at this exciting stage in its development. I look forward to working with Simon and the team to continue to grow and develop the business from the strong platform in place.”
The firm announced profit rises in its H1 results to June of +£8.4m, against a -£7.9m loss this time last year, according to its half-yearly interim results to 30 June.
Property giant LSL agrees new £100m banking facility
The facility comprises a £95m revolving credit facility and a £5 million overdraft facility provided by relationship banks Barclay’s and Lloyds TSB Bank, joined by HSBC and Santander.
The new facility replaces LSL’s existing funding package of £75m which the company said will provide working capital and acquisition finance.
Newcastle-headquartered, LSL said the loan amount has been increased to provide additional debt capacity in line with the growth in group profitability over the last three years.
Steve Cooke, LSL group finance director, said: “We are delighted with the support shown by our banking partners and pleased to welcome HSBC and Santander into our arrangement. The new facility will enable LSL to continue to deliver its strategy of investing in organic growth initiatives and making selective value enhancing acquisitions.”
Last month, in its interim statement, CEO Simon Embley said the property market had taken off since mid-April and outlined plans for further investment in its estate agency and surveying arms.
Martin Lunt, HSBC Head of Corporate for Yorkshire and the North East, said: “LSL Property Services has undergone significant recent expansion and is well placed to benefit from the renewed strength of the housing market on both sales and lettings. This latest finance package will give it the ability to continue its strong growth path through a combination of organic expansion and strategic acquisitions.”
LSL Property Services plc serves consumers and lenders and its business roughly divides into estate agency and related services and surveying and valuations.