"KMC complements our existing UK mortgage business and broker relationships through the addition of a specialist prime mortgage originator and the utilisation of our strong UK funding base."
The sale is worth approximately £2.3 billion and is expected to complete in late Q4 2022 or early Q1 2023.
Following approval from asset manager Blackstone and investment firm Sixth Street, which have jointly owned Kensington since 2015, and an auction proess, the sale to Barclays is now agreed pending regulatory approval.
Barclays is acquiring Kensington Mortgage Company Limited, Kensington Mortgage Services Limited and a portfolio of UK mortgages consisting primarily of mortgages originated by KMC from October 2021 to completion of the acquisition of the portfolio. Barclays say the acquisition will allow the lender to to become one of the few major banks with a specialist mortgage offering.
Mark Arnold, CEO of Kensington Mortgages, commented: “This 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. 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.”
Matt Hammerstein, CEO of Barclays Bank UK PLC, commented: “The transaction reinforces our commitment to the UK residential mortgage market and presents an exciting opportunity to broaden our product range and capabilities. KMC is a best-in-class specialist mortgage lender with an established track record in the UK market, strong broker and customer relationships and data analytics capabilities. KMC complements our existing UK mortgage business and broker relationships through the addition of a specialist prime mortgage originator and the utilisation of our strong UK funding base. We look forward to KMC management and employees becoming part of the Barclays group.”
Qasim Abbas, Senior Managing Director, Blackstone Tactical Opportunities, said: “Kensington’s success in becoming one of the UK’s leading specialist mortgage lenders is testament to the quality of its products, the resilience of its business model and the excellence of its management team. In particular, their collective strength in harnessing the power of data science and analytics, prudent risk management and always providing their customers with the right product to suit their individual needs has been key to the evolution of their business. We wish them the very best as they enter an exciting new chapter.”
Michael Muscolino, Partner at Sixth Street, said: “We want to thank management and the entire Kensington team for their dedication and collaboration over the past decade in building the platform into a market leader. 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.”