Enterprise Finance, the mortgage broker backed by ISIS Equity Partners, is bidding to tap the growing market for bridging finance for property development following the takeover of specialist lender West One Loans.
Enterprise, which is the UK’s largest specialist distributor of secured loans, has funded the transaction through a combination of cash and equity although the price is undisclosed.
Emily Gestetner, Enterprise’s chief financial officer, acknowledged that “this is an unconventional deal in that the market is more used to lenders acquiring distributors”.
But she added: “There are numerous synergies between the two companies that we are keen to capitalise on in order to grow the group as a whole.”
Enterprise’s board, chaired by former wealth manager David Campbell and led by chief executive Danny Waters, will be joined by West One directors Duncan Kreeger and Stephen Wasserman. West One director David Kreeger will also remain with the business.
However, following the sale of his West One shares, director and co-founder Mark Abrahams will leave to pursue other business interests. He will remain an investor in bridging loan opportunities generated by West One, as he has been since the outset.
Since incorporation in 2002, Enterprise has sourced and managed over £800m of secured loans, bridging finance and commercial mortgages. In April it was named the fifteenth fastest growing company in the UK, according to The Sunday Times’ Profit Track 100 league.
The West One takeover comes just six months after ISIS Equity Partners acquired a “significant minority” stake in Enterprise, which valued the broker at £28m and came with the promise of accelerating its growth.
Meanwhile, West One has built up a £100m property loan book – split 80:20 between residential and commercial – since Abrahams and Duncan Kreeger launched the business in 2008.
The company has positioned itself in the market as a “peer-to-peer lender” – a reference to the 250-plus wealthy individuals who provide West One with its capital. According to West One’s own recently published research, investors in short-term secured loans saw an annual return of 10.5% over the 12 months to July.
Gestetner commented: “The unique West One Loans investor model will also allow us to diversify our own funding model, which could prove very valuable in the long term. Alongside West One Loans’ different and complementary distribution channels, this makes for a very compelling proposition that will considerably strengthen our financial position.”
The two businesses, which are both based in Borehamwood, Hertfordshire, are to be integrated in the near future and will move to a new, larger headquarters in the area