M&G takes ‘substantial’ stake in Finance Ireland as ISIF exits business
Ireland’s largest non-bank lender Finance Ireland has unveiled a series of shareholder transactions, including a new €50m equity raise.
s part of this, funds controlled and managed by global investment manager M&G plc have now acquired a substantial equity stake in the business.
Existing shareholder Pimco also increased its stake in the business.
The deal will also see the Ireland Strategic Investment Fund (ISIF) exit its 33pc in Finance Ireland, a move which the company says is in line with the ISIF’s own investment strategy after scaling the business over the past 6 years.
It is understood that ISIF made gain of just over 50pc on the investment into Finance Ireland following an initial investment of around €45m.
Finance Ireland founder Billy Kane described the transaction as “a huge vote of confidence.”
“M&G know our business well as funders of our residential mortgage book and we are delighted that they have taken this step to take a substantial equity position in our business at this time,” he said.
“The timing is also significant given the exit of Ulster Bank and KBC from the market as customers look for a new provider for their mortgage and for their business financing.”
M&G’s private and alternative assets chief investment officer Will Nicol said that the investment would provide M&G with the opportunity “to take advantage of favourable structural changes as some banks withdraw from core areas of lending.”
The transaction also saw Finance Ireland raise €50m in equity to support future growth and expansion, including the planned growth of its car finance business which was recently moved onto Finance Ireland’s own balance sheet.
In 2021, new lending at Finance Ireland was more than €1bn for the first time, with strong demand continuing into this year. The lender now employs over 170 people.