Mortgage lender acquired by US insurer

Mortgage lender acquired by US insurer

Foundation Home Loans (FHL), a specialist buy-to-let and residential mortgage lender, has been acquired by Athene Holding, a Bermuda-based retirement firm providing annuity products in the US.

The deal, the details of which were not disclosed, was managed by Apollo Global Management, the private equity firm which created Athene back in 2009, and which announced in March it was merging with Athene in a deal worth $11bn (£8bn) to boost its flatlining stock price.

Athene bought FHL from Fortress Investment Group, which acquired the lender in 2010 and currently manages some $53bn (£39bn) in assets in New York.

As of June 2021, Athene claims FHL owned a £3bn portfolio of mortgages on its balance sheet.

The retirement product provider said FHL would provide it with “attractive investment opportunities in high-quality yield assets”.

FHL declined to comment on the deal, which is still subject to regulatory approval. 

Athene's chairman and chief executive, Jim Belardi, said the deal added “direct origination asset sourcing capabilities” to its investment portfolio.

Hans Geberbauer, FHL’s CEO, added that both Athene and Apollo's funding capacity would “greatly enhance” the lender’s position in the UK market and that it would continue to provide residential mortgages.

Athene is not the first US firm to buy into the UK mortgage market of late. In the last week, two UK digital brokers have been acquired by US-backed firms.

Better, a stateside digital mortgage broker, intends to enter the UK market through its buyout of Trussle - which, according to Financial Times sources, is worth just $9m (£6.5m).

US-backed entity RVU bought Mojo Mortgages - another UK-based digital mortgage broker - in large part for its technology, with the vision to scale it post-deal.

FHL’s new owner has seen its stock price remain level at about $50 (£36), despite its total assets jumping 17 per cent between 2018 and 2019, and despite making a series of other acquisitions. But post-merger announcement the price jumped to $62 (£45).

Athene’s CEO Belardi is hoping the pending merger will create "a financial juggernaut” which will unlock better value for its shareholders.

Apollo initially owned 35 per cent of Athene, but will now buy out the outstanding shares - having relied on Athene’s business to the tune of 30 per cent of its revenue. The merger is due to finalise in January 2022.