London-listed M&G revealed it has snapped up a major stake in Ireland’s largest non-bank lender Finance Ireland today, as the international savings and investments firm looks to diversify and expand.
FTSE-100 M&G has taken a 41 per cent stake in the firm, bosses said, with the investment made on behalf of the £143bn Prudential With Profits Fund and external client funds managed by M&G Investments.
Chief investment officer of M&G’s Private & Alternative Assets division, Will Nicoll said Finance Ireland was positioned to take advantage of “structural changes” in the lending market 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,” he said.
Billy Kane, Founder and Chief Executive of Finance Ireland, said the backing of M&G was a “huge vote of confidence” in both Finance Ireland and the Irish economy.
“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.”
Finance Ireland, founded in 2002 by Chief Executive Billy Kane, employs 170 people and is among the most diversified lenders in the Irish market, providing residential mortgages, commercial property, car finance, leasing, SME financing and lending to the agricultural sector.
The lender entered the residential mortgage market in 2018 and has become a material player in its domestic market, with M&G having purchased around €1bn of the mortgages in the past three years for its clients.
In 2021, the company’s lending figure passed €1bn for the first time and the new €50m equity raised will underpin future lending growth and expansion.
The company also introduced long-dated fixed rate mortgages with terms of up to 25 years, supported by an existing funding agreement with M&G Investments.