Funds advised by Pamplona Capital Management have sold a large holding of mortgage backed securities that forms part of a securitisation structure backed by approximately 2,000 UK mortgages with a total value of approximately GBP285 million.
Pamplona sold the securities for over GBP85 million in a competitive process to funds advised by Davidson Kempner, a major US institutional investor.
The mortgages are spread across the UK, with more than 40 per cent being in London or the South East, and are loans against both owner-occupied and buy-to-let properties.
Pamplona acquired the underlying mortgages in 2010, having bought them from major financial institutions in the aftermath of the financial crisis. In 2013, Pamplona completed a securitisation which saw it sell a number of senior securities backed by the mortgages to third parties, and retain more junior securities in the structure.
Michael Rosen, partner at Pamplona, says: “We are very pleased with the result of this transaction. We felt it was a bold move to enter the UK mortgage market in 2010, and the confidence and conviction we showed at that time has been rewarded over the last four years. The mortgage and housing market has steadily strengthened, and investor appetite has returned to this asset class, which has substantially increased the value of our investment.”
The mortgage securities were held in Pamplona’s second private equity investment fund, which has total equity commitments of EUR1.3 billion and was raised in 2007. Earlier this year Pamplona raised its fourth private equity fund, which has total equity commitments of EUR3 billion, and is seeking to invest in a range of sectors, including consumer, industrial and healthcare businesses. Pamplona has made four investments in the last 12 months in a range of sectors in the US and Europe, including an investment in the UK rail leasing market and two major investments in the US healthcare sector.
Pamplona’s financial advisers were Credit Suisse and Fenchurch Advisory Partners.
