Pollen Street Capital has joined with LSL Property Services to form a tech-led mortgage broker called Pivotal Growth Limited.
The new company will focus on creating market-leading technology solutions that will help mortgage and protection advisers to run their businesses more efficiently and increase their sales performance.
LSL’s existing mortgage network PRIMIS will act as a platform for the for the buy-and-build strategy.
At least £200m will be made available to fund acquisitions via Pivotal Growth. LSL and Pollen Street Capital will each invest up to £19.1m for a 47.8 per cent equity share in the company. In addition, LSL will invest up to £14.4m and Pollen Street Capital will invest up to £43.3m by way of loan notes. The remaining funds will be supplied via external debt finance.
Ian Gascoigne, a partner at Pollen Street Capital, and David Stewart, LSL’s chief executive, will both act as directors of Pivotal Growth, while LSL’s chairman Simon Embley has been appointed chief executive of the new firm.
“We are highly enthusiastic to support Simon Embley and his team in the launch of Pivotal Growth,” said Pollen Street Capital’s Gascoigne.
“Pollen Street has an extensive track record of backing successful buy-and-build platforms in UK financial services… We believe that LSL’s unrivalled experience and expertise in the financial and property services markets and Pollen Street’s extensive capabilities in investment and business transformation, form the basis for a highly successful partnership.
“While large and long established, the UK mortgage broking market remains highly fragmented, offering significant potential for synergistic consolidation.
“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.”
Pivotal Growth was created after LSL identified a significant buy and build opportunity in the mortgage and protection intermediary market. It tapped Pollen Street Capital for the joint venture after searching for an experienced partner to provide additional capital and expertise in financial services.
“Today’s news is an exciting step in LSL’s growth journey, enabling the group to further enhance its position in the UK mortgage broking market and drive innovation in this area,” said Jon Round, group financial services director at LSL.
“Broker firms who are acquired by Pivotal Growth will be able to leverage the technology investments, business development skills and regulatory compliance expertise of LSL’s network arm, PRIMIS, further strengthening their direct-to-consumer offering and providing them with even more opportunities for growth.”