LendInvest £100m BTL loan portfolio sale to J.P. Morgan
LendInvest plc (LSE: LINV), the leading technology driven asset manager for property finance, is pleased to announce the sale of a £100m buy-to-let portfolio to J.P. Morgan.
- The portfolio will sit within J.P. Morgan’s Separate Account Mandate and will increase the total Separate Account capacity from £625m to £725m.
- The portfolio sale will generate a net increase of profit before tax for the current financial year of £1.6m.
- The transaction is in line with LendInvest’s strategy of transferring assets under management originated via our Genesys platform into third party accounts and fund structures, and similar transactions may be carried out in future.
- Whilst the sale will bring forward certain profits arising from the first half of the 2023 financial year into the current financial year, the Board remains confident with current market expectations for FY23 and beyond.
In January 2021 LendInvest completed the establishment of a Separate Account Mandate with J.P. Morgan with a total capacity of £625m. This investment in our buy-to-let product expands our capacity to lend in this market, while providing J.P. Morgan with exposure to buy-to-let mortgages which have been originated via LendInvest’s proprietary technology platform.
LendInvest has an ongoing arrangement with J.P. Morgan to allocate a portion of monthly buy-to-let originations to its Separate Account. This transaction transfers £100m of previously originated buy-to-let loans into that Separate Account, growing its capacity from £625m to £725m. The consideration being paid by J.P. Morgan is in line with the existing terms of the ongoing arrangement, as described in the Company’s AIM Admission Document, together with an incremental payment of £1.67m.
This sale is representative of the growing appetite of global institutions to invest in mortgages through LendInvest. It follows our announcement in August 2021 where we reported a £150m partnership with Barclays and HSBC to provide short-term finance to property entrepreneurs around the UK.
Rod Lockhart, chief executive of LendInvest, commented: “I am very pleased to be able to announce this transaction so soon after our IPO. The sale is an opportunity to deepen our Separate Account with J.P. Morgan, made possible by strong market conditions and good performance in our buy-to-let portfolio over recent months.
It is representative of our continued momentum in attracting some of the world’s most sophisticated investors. Genesys, our proprietary technology platform, and broker-focused model allows LendInvest to efficiently originate property finance loans, providing partners with access to an asset class with attractive risk-adjusted returns.
This transaction reflects our intentions at IPO to move more assets off our balance sheet over time, seek to take these profitable opportunities when they present themselves, and strengthen our funds management business model.”