M&G plc (“M&G”), the international savings and investments business, announces it has acquired a 41% stake in Finance Ireland, Ireland’s largest non-bank lender. The investment is on behalf of the £143 billion Prudential With Profits Fund and external client funds managed by M&G Investments.
Finance Ireland is the most diversified lender in the market, providing residential mortgages, commercial property, car finance, leasing, SME financing and lending to the agricultural sector. In 2021, the company’s lending figure passed €1 billion for the first time and the new €50 million equity raised will underpin future lending growth and expansion.
In 2018, Finance Ireland entered the residential mortgage market and has become a material player in its domestic market, with M&G having purchased around €1 billion of these mortgages in the past three years for the benefit of its clients. Last year, the company introduced long-dated fixed rate mortgages with terms of up to 25 years, supported by an existing funding agreement with M&G Investments.
The company, founded in 2002 by Chief Executive Billy Kane, now employs 170 people and in many cases provides innovative products such as the long-dated fixed rate mortgages and its award winning MilkFlex loan, which has lent more than €250 million to Irish dairy farmers.
The investment is managed by M&G’s dedicated speciality finance and consumer loans team which was formed in 2017 and is part of the firm’s £72 billion Private & Alternative Assets division.
Will Nicoll, Chief Investment Officer of M&G’s Private & Alternative Assets division, says: “Finance Ireland is the largest non-bank lender within the Irish market and is well positioned to take advantage of favourable structural changes as some banks withdraw for core areas of lending. In addition to the growth potential of the business, the investment provides us with long-term funding opportunities as we continue to partner with the team to bring innovative financing solutions to Irish businesses and consumers.”
Billy Kane, Founder and Chief Executive of Finance Ireland, says: “This transaction is a huge vote of confidence not just in Finance Ireland but in the Irish economy, providing us with long-term investors to grow and expand our customer offering and execute our long-term growth strategy.
“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. 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.”