Estate agency giant LSL has entered into a joint venture with private equity firm Pollen Street Capital (PSC) to set up what the two companies hope will become a leading national tech-led mortgage broker.
The business will be established via the purchase of existing brokerages and will be financed with a £200m fighting fund financed partly via cash from LSL and PSC, and debt.
The JV hopes to build a business and then exit within three to six years with LSL putting in £33.5m and PSC, £62.4 million.
“Across a fragmented market, LSL has identified a potential pipeline of over 50 larger firms which could be grown further with the benefits offered by Pivotal and the initial strategy will focus on these larger businesses, thereafter, targeting smaller firms,” says LSL.
These will join LSL’s existing PRIMIS network of 2,600 mortgage advisors, which already has 9% of the total house purchase and remortgage market.
PRIMIS will act as a platform for the buy-and-build strategy reducing administrative, compliance, payment, technology, and support service costs.
Simon Embley is to step down from his role as LSL board Non-Executive Chair to head up the new venture as Chief Executive.
He is personally investing £4 million into the firm which is to be called Pivotal Growth.
Jane Cross, previously Chief Risk Officer of the Group’s PRIMIS network and Managing Director of its e.surv surveying business, has been appointed Chief Operating Officer.
David Copland, previously LSL’s Director of Mortgage Services, will be the Strategy and Business Development Director.
David Stewart, Group Chief Executive of LSL, says: The establishment of the Pivotal Growth joint venture with Pollen Street Capital will enable us to establish a leading position in the provision of direct-to-consumer advice and underpins the pre-eminent position of our PRIMIS network.”