M&G acquires major stake in Finance Ireland

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M&G has acquired a 41% stake in non-bank lender Finance Ireland for €50m.

The investment in Ireland’s largest non-bank lender was made on behalf of the £143bn (£166bn) Prudential With Profits Fund and external client funds managed by M&G Investments.

Finance Ireland has a hugely diversified range of lending products including residential mortgages, commercial property, car finance, leasing, SME financing and lending to the agricultural sector.

In 2021, the company’s total lending surpassed €1bn for the first time and the new €50m equity raised from M&G will underpin future lending growth and expansion.

In 2018, Finance Ireland entered the residential mortgage market and quickly established itself as an important player in its domestic market, with M&G having purchased around €1bn of these mortgages in the past three years for the benefit of its clients.

Last year, the company introduced long-dated fixed rate mortgages with terms of up to 25 years, supported by an existing funding agreement with M&G Investments.

Finance Ireland was launched in 2002 by chief executive officer Billy Kane and now employs 170 people.

It provides innovative products such as the long-dated fixed rate mortgages and its award winning MilkFlex loan, which has lent more than €250m to Irish dairy farmers.

Will Nicoll, chief investment officer of M&G’s private and alternative assets division, said: “Finance Ireland is the largest non-bank lender within the Irish market and is well positioned to take advantage of favourable structural changes as some banks withdraw [from] 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.”

Kane added that “M&G know our business well as funders of our residential mortgage book” and said that the timing of this acquisition 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”.

M&G’s investment is managed by its speciality finance and consumer loans team which was formed in 2017 and is part of the firm’s £72bn private and alternative assets division.