Barclays Private Equity has sold its 66% stake in Preferred Mortagages to Lehman Brothers for 2.3 times its original investment generating an IRR of over 40%. Rotch Property Group also held a 15% stake in Preferred Mortgages and management held the balance. Both have sold their shares to Lehman Brothers alongside Barclays Private Equity.
Preferred Mortgages was formed in 1996 and was bought out by management in 2001, backed by Barclays Private Equity. Since the buyout the business has achieved growth in both mortgage lending and profitability. For 2003, the company is on target to deliver a 65% growth in new business completions and a 64% rise in the number of mortgage accounts.
Owen Clarke of Barclays Private Equity said: “Preferred Mortgages has outstripped its competitors in a rapidly growing mortgage market while maintaining prudent lending criteria throughout. The track record of the business is a testament to the focused and determined management team. The company is well positioned for its next phase of development.
Based in Haywards Heath, Preferred Mortgages now employs 200 people. It has a broad range of products providing mortgages to applicants who may find it difficult to get a mortgage from traditional lenders. The company covers many market sectors including non-conforming house purchase/re-mortgage, right to buy, self-employed/self certification, buy to let and shared ownership.