It also appoints former Bluestone exec as new RWF CEO
Yellow Brick Road Holdings (YBR) and its associate Resi Wholesale Funding (RWF) have entered into several agreements aimed at accelerating RWF’s growth and positioning it as a standalone business.
The agreements are part of a broader effort to enhance RWF’s operations and support its evolution as a non-bank lender in the Australian mortgage market.
Since its establishment in 2019 as a start-up, RWF has grown its warehouse-funded mortgage loan portfolio to approximately $400 million, despite facing industry challenges. This growth has been supported by foundation partner Magnetar and warehouse funding providers.
Key elements of the new agreements, several of which remain subject to conditions expected to be met by October 18, include the appointment of Campbell Smyth (pictured above left), former chief executive of Bluestone Home Loans, as RWF’s first full-time dedicated CEO.
Smyth is credited with transforming Bluestone into a major non-bank residential mortgage lender with a balance sheet exceeding $5 billion. His initial focus will be on expanding RWF’s product distribution within YBR’s broker networks, with plans to pursue third-party distribution and product expansion in the future.
RWF will also assume direct responsibility for its Resi sales, credit, and support teams, which were previously employed by YBR Group. This move will give Smyth greater control over these functions.
In addition, YBR Group’s corporate services for RWF, including accounting, payroll, legal, and other functions, will be formalised through cost-sharing and outsourcing arrangements. RWF and YBR will share revenue streams and costs related to current and future Resi white-label and sponsorship product arrangements.
To further support RWF’s growth, YBR and Magnetar will inject $4.2 million in new capital into RWF, providing it with a two-year working capital runway. Both will also convert $3 million in shareholder loans into equity to strengthen RWF’s balance sheet.
As part of the agreements, YBR Group will grant RWF a five-year call option to acquire the Resi brand and related intellectual property for $8 million, subject to certain adjustments.
“The actions we are taking represent several significant and complex structural initiatives, achieved through thoughtful planning and collaboration by YBR and its partners,” said Adrian Bouris, chairman of Resi Wholesale Funding. “We anticipate they will greatly boost RWF’s growth and positioning in the market.”
“This is a key initiative and important milestone in the strategic review of the YBR Group we announced in 2023, being to restructure the YBR Group’s efficiencies and value,” added Mark Bouris (pictured above right), executive chairman of Yellow Brick Road.
“We expect these matters to save cost to YBR, but more importantly deliver better outcomes and direct control to RWF. YBR Group’s distribution, operational and marketing teams are fully behind these initiatives.”
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