Buyout Giants Team Up For Sub-Prime Lender
Two of the world's biggest private equity groups have joined forces to mount a takeover bid for Kensington, one of the UK's biggest specialist mortgage lenders.
Sky News understands that Blackstone and TPG will table a combined offer for the business ahead of a deadline towards the end of the month.
The buyout giants are understood to be competing against at least three other bidders for Kensington, one of which is said to be Lonestar, a specialist US property investor.
Kensington is owned by Investec, the Anglo-South African banking group which sponsors the England cricket team.
The mortgage operation was bought by Investec for £283m in 2007, just before the start of the banking crisis.
Analysts say the bank should recoup the vast majority of that initial outlay, with Kensington's performance aided by the strength of the UK housing market.
Other bidders for the business are reported to have included Goldman Sachs, Virgin Money and Metro Bank, although at least two of them are understood to no longer be involved.
The auction of Kensington, which is being handled by Fenchurch Advisory, comes amid increasing signs of an overheating housing market in London and the south-east.
On Tuesday, Lloyds Banking Group said it would limit mortgage lending to four times an applicant's salary in London where the value of the loan exceeded £500,000.
The Bank of England's Financial Policy Committee is expected to discuss further measures to cool the market when it meets next week.
Blackstone and TPG declined to comment on Wednesday.