Castle Trust, which counts former government minister Lord Deben and non-executive director of HM Treasury Dame Deirdre Hutton on its board, will offer a shared mortgage product and a retail investment product called a HouSA in a bid to tap the homeowner market.
US private equity firm JC Flowers, where McCarthy used to be chairman of the European arm, has backed the venture with £65m alongside additional investment from management.
The products are designed to solve the problems of the high gearing and high cost of housing for potential homeowners and investors, the firm said.
“We are bringing genuine answers to things that have been happening for a long time,” McCarthy, who chairs Castle Trust, told City A.M. “We believe this brings genuine innovation to the housing market. If it were not for that I wouldn’t have colleagues on the board and I wouldn’t be on the board.”
David Morgan, managing director of JC Flowers for Europe and Asia Pacific is also non-executive director of Castle Trust.