Kensington Mortgages, a specialist broker and lender to the UK’s self-employed, has been sold to Barclays Bank UK PLC. The acquisition will allow Barclays to become one of the few major banks with a specialist mortgage offering and provides an exit for Blackstone Tactical Opportunities and Sixth Street.
The sale follows an auction process that attracted interest from a broad range of bidders. Barclays is acquiring the business from funds affiliated with Blackstone Tactical Opportunities (“Blackstone”) and Sixth Street, which have jointly owned the business since 2015 during which time Kensington enjoyed an extended period of accelerated growth. The transaction is subject to regulatory approval.
Barclays is acquiring a portfolio of UK mortgages consisting primarily of mortgages originated by KMC from October 2021 to completion of the acquisition of KMC and KMS (the “KMC Mortgage Portfolio”).
Kensington is a specialist residential mortgage lender focused on providing mortgages via brokers to borrowers with complex incomes. It focuses on the self-employed and those with multiple or variable incomes – segments that major banks often do not serve.
The business, which is based in Maidenhead and has around 600 employees, services approximately £8.7 billion of third-party and related party mortgages in addition to the KMC Mortgage Portfolio. Kensington originated approximately £1.9 billion* of mortgages in the year ended 31 March 2022.
Under the joint ownership of Blackstone and Sixth Street, Kensington has improved its processes and expanded its product offerings to become a market leader in specialist lending to the self-employed, first-time buyers, older borrowers and customers with multiple sources of income.
The business has grown its originations at a compound annual growth rate of 22% since the acquisition in 2015.
Mark Arnold, CEO of Kensington Mortgages, said the sale marks the start of an exciting new chapter of growth for Kensington.
“We have a strong track-record in the specialist mortgage space, using our proprietary data and tech platform to innovate and grow, and now is a natural point to bring in a partner who can help us to drive our next expansion phase,” said Arnold.
“As a major UK bank with a broad reach and offering, Barclays is well-placed to support this expansion, whilst the sale will allow it to differentiate itself as a ‘mainstream specialist’ and offer a range of mortgage solutions not available from competitors,” he said.
Michael Muscolino, Partner at Sixth Street, said: “Our focus on using data to drive consistent innovation allowed us to create new products and broaden mortgage access while maintaining exceptional underwriting standards. We wish the company great continued success with its new partners at Barclays.”