Investment firm buys non-bank

by Manuelita Contreras26 Feb 2018

Specialist lender Bluestone Mortgages Asia Pacific said yesterday that it has agreed to be acquired by U.S. private investment firm Cerberus Capital Management.

Parent company Bluestone Group UK will fully divest its interest in the Asia Pacific business as part of the deal.

The acquisition comes more than four years since Bluestone returned to the Australian mortgage market after pulling out during the global financial crisis. The lender, which generates around 96% of its loans through brokers, has written more than $1.3bn in mortgages since 2013, and has more than $8bn in loans under management.

The Australian Financial Review reported yesterday that Cerberus Capital Management plans to use its purchase of Bluestone as a springboard to expand in Asia Pacific. The investment firm has US$30bn in assets under management and invests mainly in distressed securities and assets, private equity, middle market lending, and real estate.

A Cerberus spokesperson told the AFR that beyond the Bluestone deal, the investment firm is looking at more opportunities in company platforms and assets in the lending and real estate sectors.

The transaction follows two acquisitions of mortgage lenders by global private equity firms last year. Blackstone became a majority stakeholder in La Trobe Financial in December after taking an 80% stake in the non-bank lender. A month earlier, Pepper Group shareholders approved the takeover of the company by a unit of KKR Credit Advisors.

Bluestone Asia Pacific CEO Campbell Smyth said the company’s day-to-day operations will remain unchanged and its current management and staff will continue to run the business.

“This is a great moment for the business and the whole team is embracing the investment by Cerberus,” said Smyth. “The transaction will enable the company to actively evolve its product portfolio and service offering. In the short-term, the company will focus on actualising a number of imminent expansion options that meet the demands of emerging sectors.”

Smyth said the company will be in a position to “aggressively capitalise” on future opportunities.

“The net effect of this growth model will be more options for brokers and borrowers, alike,” he said, adding that the transaction is a win for all involved.

Smyth said his company is moving to a bigger office space to accommodate its current team and future staff.

 

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