Private equity firm Phoenix Equity Group has sold Key Retirement to Partners Group, a global private markets investment manager, for £208m.
The sale comes four years after Phoenix invested in the equity release specialist adviser.
Phoenix said the sale of Key Retirement would deliver a return of around four-and-a-half times the investment cost, adding it was the sixth significant realisation from Phoenix’s 2010 Fund.
Phoenix said Key Retirement's profits had increased threefold over the period of Phoenix’s ownership.
Sandy Muirhead, partner at Phoenix, said he was "delighted" with the "strong growth" the firm had achieved during our ownership period.
"It has been a privilege to work with KRG’s outstanding management team, and we wish them, and the business, continued success with their new partners,” he said.
In 2016, KRG advised around 9,000 customers, providing around £530m in lifetime mortgages.
Following the acquisition, which is subject to regulatory approval, Partners Group said it would continue to work with Key Retirement's management team, led by current co-chief executive Simon Thompson.
Mr Thompson thanked Phoenix for their "strong support", calling them "outstanding partners".
"Our group was transformed during their ownership and we look forward to continued growth alongside Partners Group," he said.
He welcomed the sale to Partners Group, saying there was "a real need for specialist financial services for those in or approaching retirement, which creates a compelling market opportunity for Key Retirement".
"We believe the Partners Group team has the right experience and network to support the successful build-out of our platform and explore new segments of the market," he said.
Andrew Deakin, managing director of private equity Europe at Partners Group, said the purchase was "a great opportunity to support an established market leader within a high growth market niche".
He said: "The business has significant scope for further value creation and we look forward to working with Simon Thompson and his team to build out Key Retirement's service offering over the next several years."
The sale comes at the start of what many are predicting will be a booming year for the equity release industry, as the first big wave of interest-only mortgages that were sold in the 1990s reach maturity.
However, figures released yesterday (18 April) by Moneyfacts revealed equity release rates were at an all-time low, as the increasing number of products and providers increases competition.
james.fernyhough@ft.com
