The firm also unveils new referral relationship and seeks capital
An Auckland-based mortgage broker has announced a new acquisition, a new referral relationship, and a move to raise $20 million of fresh capital.
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Squirrel Mortgages has expanded its footprint in Wellington through its acquisition of The Home Loan Shop, in a deal that will supplement the firm’s online and remote services. The value of the deal has not been disclosed.
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David Cunningham, CEO of Squirrel Group, of which Squirrel Mortgages is a part, said the acquisition will see Squirrel’s team grow to more than 100, originating some $2.5 billion of mortgages annually and representing more than 6% of NZ’s mortgage broker market, interest.co.nz reported.
The two companies will operate as separate entities until mid-2023, with The Home Loan Shop’s founder, Greg Scott, to stay on and report to Cunningham.
Squirrel has also partnered with enable.me in a move that will position the mortgage broker for further growth. The deal will see Squirrel taking on the Hannah McQueen-run enable.me’s trail mortgage book and becoming its preferred provider for mortgages via a referral relationship.
Cunningham also told interest.co.nz that the group is also looking to raise equity to support the expansion of its lending activities.
“We are targeting about $20 million of new capital, with new investors therefore owning a meaningful stake in Squirrel Group,” he said. “The additional capital would primarily be used to support growth of our wholesale debt facilities; typically these require an equity and mezzanine layer. These debt facilities are used to warehouse loans prior to them being made available to investors via the peer-to-peer platform [Squirrel Money] and our managed funds, and to provide overall liquidity for the Group. Over time, securitisation will become a further funding option, which will be dependent on building credit performance history for our portfolios.”
Squirrel said its loan book currently sits at $100 million, interest.co.nz reported.
