Royal Bank Private Equity has sold its interest in Malvern House Acquisition, the holding company of igroup, a leading UK provider of non-conforming mortgages, to GE Capital. The deal is subject to regulatory approval. Terms were not disclosed but the deal brings GE Capital a GBP1.6 billion portfolio of mortgage assets.
Malvern House Acquisition was a management buyout vehicle set up in 1999 to acquire Ocwen UK plc from Ocwen Financial Corp of the US. The consideration paid at the time of the deal in October 1999 was GBP74 million.
The deal also sees GE Capital buying 100 per cent of Midland & General, one of the UK’s leading personal finance brokers. igroup will become part of GE Capital’s consumer finance division.
igroup focuses on lending to the approximately eight million individuals in the UK who do not meet the credit scoring criteria of traditional lenders. Non-conforming mortgages cater for the self-employed with variable incomes and others who are not served by traditional lenders.
Charles Alexander, president of GE Capital Europe, said: “We expect this important part of the mortgage sector to continue to grow strongly over the coming years. Acquiring igroup allows us to offer products that are complementary to our existing range, and it opens up a new distribution channel for us.”
igroup’s management team will remain with the company following the acquisition, and will continue to focus on distribution of mortgage products through intermediaries.