Latest News
Exit Announcement – Starling Bank acquires Fleet Mortgages for £50 million
We are delighted to confirm a substantial exit for West Hill investors in the highly respected buy-to-let mortgage platform business, Fleet Mortgages. Starling Bank has agreed to acquire Fleet for cash and equity, valuing the business at £50 million, providing in due course a substantial double digit return for shareholders.
Fleet was established in 2014 to originate, sell and service 1st charge buy-to-let mortgage loans, primarily to professional and semi-professional landlords on properties in the UK. The business was led by a highly experienced team who had successfully operated in the field for many years and partnered with a variety of Forward Flow providers including BlackRock, Pimco and Citi amongst others.
To date, Fleet has originated £2.3 billion of mortgages and experienced zero credit losses. The Company currently has around £1.75 billion of mortgages under management. Under the terms of the deal, Starling will become the sole funder of future originations for Fleet Mortgages. No further equity was raised by Fleet since launch.
Starling Bank has achieved an enviable position as perhaps the leading Challenger Bank in UK, particularly evidenced by its impressive growth in SME and individual client accounts attracted by its tech platform and offering, leading to a very material low cost current deposit base of several £’bns. The acquisition will permit the Bank to deploy some of those liabilities into attractively yielding BTL assets.
At £50m returns for West Hill investors will be 12.5x assuming no future growth in the value of Starling shares once issued but multiples could in due course be significantly higher on moderately conservative assumptions of future share price growth.
Andrew Galloway of West Hill commented:
“West Hill investors backed Fleet as a start up in 2014 attracted by the team’s long and impressive performance in this sector and the relatively low start up capital requirements in relation to the scale of lending envisaged and quality of partners involved. The fit with Starling is superb and we wish all parties the very best of luck for the future”.
