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Old Mutual funds eye stake in newly-listed lender

Old Mutual Global Investors says it wants to buy £100m worth of shares in newly-listed lender Charter Court Financial Services.

Charter Court, the parent of Precise Mortgages, confirmed this morning that it will list on the London Stock Exchange main market for more than £500m.

The firm says it will use the listing to boost its profile and expand further.

The move was rumoured yesterday, but confirmed this morning in a Stock Exchange announcement.

The announcement says that OMGI has sent the firm a “letter of intent” to acquire £100m worth of shares on behalf of its funds “subject to certain conditions”, but did not elaborate on these.

Yesterday, Old Mutual also announced OMGI would be split into a multi and single asset business, with chief executive Richard Buxton reportedly talking to private equity firms about a takeover of OMGI’s remaining single strategy business.

The initial public offering will see the firm issue £20m of new shares and sell existing shares held by major shareholders Elliott International, Elliott Associates and existing management.

This will mean at least 40 per cent of Charter Court is made public.

Precise Mortgages managing director Alan Cleary says: “Since our formation in 2008, the hard work in building this bank and its scalable growth platform has been achieved and the volume of our business already is outstripping some of our listed competitors.

“We are now focused on the next phase of our development and I believe our IPO and listing will further enhance Charter Court’s profile and support our future growth.”

The firm says it will grow in part through further organic growth and targeting underserved secured lending markets.

Charter Court says its £4.4bn net mortgage loan book as at 30 June 2017 has grown at a compound annual growth rate of 92 per cent since 31 December 2014.

It adds that this is all organic growth achieved through more than 17,000 intermediaries.

The Stock Exchange announcement says: “The IPO and listing are intended to position the group for its next stage of development, including further raising its profile, assisting in retaining and incentivising employees and providing it with a platform for future growth.”

It adds: “Looking ahead Charter Court’s strategy continues to focus on taking advantage of the growth opportunities its sees in the increasing complexity and sophistication required to service its core specialist mortgage markets and as the buy-to-let market continues to professionalise as a result of ongoing regulatory and market change.”

Charter Court wants to pay dividends of at least 15 per cent of annual profits, and increase this over time.

The first dividend payout should be paid in the second half of 2018.

Charter Court also owns the Exact Mortgage Experts and Charter Savings Bank brands.

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