Patron Capital sells Optimum Credit to Pepper Money

By James Wallace - Wednesday, October 10, 2018 9:40

Patron Capital has agreed terms to sell its entire prime second-charge mortgage lending business, Optimum Credit, to mortgage lender Pepper Money, which includes a loan book of more than £450m.

Optimum Credit, based in Cardiff, was established by a very experienced senior management team, led by Sam Marshall, and backed by Patron Capital. The company wrote its first loan in 2014, offering a range of variable, fixed and discounted second-charge mortgages to homeowners in England, Wales and Scotland.

Last summer, the business completed the first public securitisation of second charge mortgages by a UK mortgage lender since the 2008 financial crisis. 

Keith Breslauer, managing director of Patron Capital, said: “Having identified the opening for a non-bank second-charge mortgage lender and backed Optimum Credit’s experienced management team to set up the business around four years ago, the company has flourished and has been an exceptionally successful investment.

“We are proud to have grown Optimum Credit into a market leader in the non-bank mortgage space, with more than 25% market share, and look forward to seeing Sam and his team continue to build on their success under new ownership.”

Laurence Morey, chief executive officer of Pepper Money, said: “Earlier this month, we announced that Pepper Money was starting the journey of seeking a banking licence and that we would be considering targeted acquisitions to complement our organic growth plans for the business.

“We are looking forward to how this acquisition will enhance the growth of Pepper Money’s intermediary-led secured lending proposition and are excited at the prospect of supporting the Optimum Credit team in the continued development of their unique proposition supported by excellent systems and intermediary relationships in an exciting market segment.”

Sam Marshall, chief executive officer at Optimum Credit, added: “We are pleased to be joining the Pepper Money team in the UK. Pepper Money has shared a very similar development journey to ours at Optimum Credit; we share a common culture and entrepreneurial approach with the intermediary and UK residential property owner at the core of our proposition. This acquisition will give Optimum Credit access to a wider range of resources and shared expertise that will enhance our business and enable our continued growth.”

Houlihan Lokey acted as the exclusive financial adviser to Patron Capital.

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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