LSL, the parent company of mortgage network Primis, has sold off two of its mortgage broker firms to its new private equity-backed venture, Pivotal Growth.
Group First - which operates under the brands Mortgages First and Insurance First - and RSC New Homes (RSC) will both now sit under Pivotal Growth, but will remain appointed representatives of Primis.
The idea behind the new venture, which was launched less than two years ago, is to buy and build a national mortgage broker underpinned by technology and compliance services.
Both RSC and Group First are specialist new-build mortgage and insurance brokers, headquartered in Cheshire and Colchester respectively.
LSL said it considers Pivotal Growth "to be better placed to increase the value of Group First and RSC".
In December 2021, Pivotal Growth - with a pot of £200mn behind it from London-based Pollen Street Capital - bought its first brokerage, Glasgow's Lifetime Finance Group.
We have identified significant opportunities to develop LSL’s position as the leading provider of services to independent mortgage brokers.David Stewart, LSLSince then, it has been making further acquisitions.
These include a Southport buy-to-let broker and specialist broker in Northampton, Grange Mortgage and Protection Services.
Though in May 2022, LSL reported lower profits due to the fact expansion of its broker consolidator had been "slower than expected".
LSL has committed up to £33.5mn to support the acquisition of mortgage advice firms to be made by Pivotal Growth, while Pollen Street Capital has committed up to £62.4mn.
The investment by both parties is being supplemented with external debt finance in Pivotal Growth to fund purchases.
LSL employs a mixture of mortgage advisers, conveyancers and estate agents.
Its operates a network of 228 owned and 127 franchised estate agency branches, with brands that include Your Move, Reeds Rains and Marsh & Parsons.
Group chief executive of LSL, David Stewart, said the transfer of Group First and RSC represents "an important step" in the execution of its strategy and development of Pivotal Growth.
He added: "Financial Services is at the heart of the group’s growth strategy where we have identified significant opportunities to develop LSL’s position as the leading provider of services to independent mortgage brokers."
When the consolidator launched in April, Simon Embley, LSL’s non-executive chair, was announced as its chief executive.
Embley previously led the growth of LSL through a private equity backed buy-and-build strategy before the listing of the business in 2006.
Today (January 13), he said Pivotal Growth was starting 2023 with "the strong momentum of two acquisitions".
He added: "Through investment in their people, systems and technology, we plan to organically grow these businesses to further cement our position...in the new homes market, where we will continue to explore opportunities in the future.”
ruby.hinchliffe@ft.com
