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LSL Announces £200m Joint Venture with Pollen Street

LSL has announced a joint venture with Pollen Street Capital to establish Pivotal Growth, a vehicle seeking to become a leading national mortgage broker powered by market leading technology, first class regulatory compliance and exemplary customer service.

It is planned that at least £200m will be made available by way of equity and debt to fund acquisitions. LSL has committed up to £33.5m and PSC up to £62.4m to support the acquisitions to be made by Pivotal Growth. The investment by LSL and PSC will be supplemented with external debt finance in Pivotal Growth to fund purchases, with a view to an exit event over a three-to-six year period.

LSL’s Chairman, Simon Embley, has been appointed Chief Executive of Pivotal Growth and will step down from his role as Non-Executive Chair of the LSL Board, following the publication of the Group’s Preliminary Results for 2020 on 28 April 2021.  At the same time, Bill Shannon, currently Deputy Chair and Senior Independent Director, will become Chair of the LSL Board and Chair of the Nominations Committee.  A separate announcement released today has further details relating to the Board and Committee changes.

All major strategic decisions in relation to Pivotal Growth are subject to the agreement of both LSL and PSC. David Stewart, LSL’s Chief Executive Officer, and Ian Gascoigne, Partner at PSC, will be directors of Pivotal Growth.

LSL operates one of the largest Financial Services network and advisory businesses in the UK with around 2,600 advisors. Through its PRIMIS intermediary network, it accounted for £32.6bn of mortgage completions in 2020, representing approximately 9% of the total purchase and remortgage market, and in 2020 provided new protection insurance policies generating around £54m of annualised premium. LSL is also a specialist in providing mortgage and protection advice to estate agency customers and operates two of the UK’s largest new homes mortgage advice businesses.

A particular area of focus is the development of market leading technology solutions, that assist mortgage and protection advisers to run their businesses efficiently and effectively and to increase sales performance.  The Toolbox system is used to manage the operations of all PRIMIS members and will be the operating and technology platform for the Pivotal Growth “buy and build”. Pivotal Growth will also use the technology of the recently acquired Mortgage Gym and Direct Life & Pensions businesses which offer award-winning solutions for the mortgage and protection markets respectively.

Pivotal Growth has entered a long-term arrangement with PRIMIS, with all acquired businesses anticipated to become PRIMIS members, leveraging further PRIMIS’s scale and existing leading positions in the mortgage and protection markets.