FTAdviser.com

Advertising

Last week the equity release provider announced a deal that, subject to regulatory approvals, would see Phoenix Equity Partners sell its majority stake in Partnership to Cinven for €200m (£158.7m).

Steve Groves, managing director of Partnership, said Cinven would inject further capital into the business to bolster the company's balance sheet, which was already "very strong" and had committed to further substantial investments if required to support future business developments.

Cinven confirmed in addition to buying out the existing shareholders it expected to make a significant investment in Partnership's staff, brand, infrastructure and distribution channels.

The announcement came a month after Partnership took the decision to withdraw its lifetime mortgage product.

At the time the equity release provider said the increased cost of money meant it was unable to maintain a competitive interest rate for new customers.

Mr Groves said although the deal could not be described as a panacea it would increase the chances of returning to the market as soon as possible.

He said: "We obviously have more capital behind us now, which gives us more resource and gives us the opportunity to fund a proportion of the lifetime mortgages.

"We have not at this stage firmed up exactly what we are going to do and how we are going to do it but it certainly opens up a lot more options to us."

However Mr Groves said he was unable to say when Partnership would be looking to launch a new product range.

He said: "As you would expect we are talking to potential funders at the moment but we have not got an agreed way forward purely because we have only just started the process of talking to them.

"The acquisition helps but I do not think it is a silver bullet. We will continue on the process of working with funding organisations until we find the right one for our proposition."

Duncan Young, chief executive of equity release provider Retirement Plus, said the acquisition was good news for Partnership and the equity release sector.

He said: "It is a positive move to have a big owner like Cinven."

Tim Loy, chief executive of Leeds-based equity release adviser Age Partnership said he expected Partnership to become a lot more active in the sector.

He said: "With the backing an organisation with the stature and resources of Cinven clearly you would expect them to grow and develop their business in the next few years."