The non-bank lender has announced that it will take a controlling stake in financial services company International Acceptance Group, effective 1 January 2020.
Consideration for the 60 per cent acquisition was $6 million, with Resimac holding an option to acquire the remaining 40 per cent in Sydney-based lender and financial services company International Acceptance Group (IA Group).
Established in 2001 and headed up by Mike Cunningham, IA Group offers secured commercial and consumer lending and has its own principally funded portfolio of $50 million.
Non-bank lender Resimac has now announced that it has taken a controlling stake in IA Group, effective 1 January 2020, as it continues its diversification strategy and facilitates expansion into new secured asset classes.
Resimac chief executive Scott McWilliam commented: “Our investment in IA Group allows us to fulfil a key part of our growth and diversification strategies. It allows Resimac to gain synergies from our existing distribution network and provides the platform for Resimac to enter the asset finance market.
“In addition, we are able to leverage our strong securitisation program to support this activity.”
Speaking to The Adviser about the new partnership, Mr McWilliam commented that the IA Group was a clear choice as it not only provided Resimac with “an immediate entry into the asset finance space” but also because it had a proven track record and a culture that was a “good fit” with Resimac.
He commented: “With this particular opportunity, IA Group maintains 40 per cent ownership so it is a real partnership approach and we believe that this provides a good balance as an entry point for us and a good balance for success.
“The IA Group already have lending capacity and a warehouse in place. And it's a truly diversified asset finance company where they currently have the ability to lend in the commercial space and also the consumer space.”
Mr McWilliam told The Adviser that Resimac planned to continue to leverage off the different parts of its existing infrastructure and expand into new areas, as per its strategic plan.
He said: “The asset finance space is a really good example of this. Like mortgages, asset finance is largely secured and securitisable, which is really the business that we're in. It will take us time to grow in new markets and asset finance is no different. But it is about leveraging off our existing infrastructure and tapping new markets with new products.”
The CEO added that broker distribution for the asset finance products would remain a priority.
He said: “We are a relationships-based business and asset finance is absolutely no different. The company (IA Group) is a standalone company because, while we're taking a controlling stake, we don't fully own it. Similar to the mortgage space, it heavily relies on brokers for distribution. That's a core part of what we do as an organisation; to provide a strong service proposition and experience to brokers, whether they're mortgage brokers or, in this case, asset finance brokers.”
Mr McWilliam concluded: “In line with what we've been doing over the last 12-18 months, we will continue to invest in our service proposition and experience with the broker community. We will continue to invest in technology and improve our digital footprint (where it makes sense) as we continue to diversify our funding program and look to tap new jurisdictions where our assets are well received. And with this particular transaction, it allows us to diversify our asset classes.”
IA Group managing director and CEO Mike Cunningham added: “It’s an exciting opportunity to partner with Resimac.
“We believe it’s a good cultural fit, and access to the Resimac distribution network will provide many benefits for both organisations.”
The move follows on from several strategic moves from residential mortgage lender Resimac, including the recent announcement that it would no longer offer credit products funded by third parties from 1 January 2020.
As of the new year, Resimac will discontinue its white label-funded Resimac MoniPower and Resimac Accelerate products for new business in order to exclusively sell loans financed by its own securitisation program, distributed under the Resimac brand via its broker network and via mortgage managers.
[Related: Resimac acquires stake in Positive Group]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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