Starling makes Fleet Mortgages its first acquisition with £50m deal
UK challenger bank Starling has made its first acquisition, a £50 million deal for buy-to-let mortgage group Fleet Mortgages.
Starling and Fleet say they have a “cultural fit”
The acquisition, a cash and share purchase, looks to be the first of a series of grabs by the UK bank as it aims to expand into mortgages as an asset class.
Fleet Mortgages, based in Hampshire, focuses on providing mortgages to professional and semi-professional buy-to-let landlords.
It has originated £2.3 billion of mortgages, with £1.75 billion under management. The firm claims to have experienced zero credit losses.
Starling says that day-to-day operations at Fleet will remain unchanged, and the company’s existing senior management will stay in charge.
Anne Boden, the challenger bank’s CEO, says: “We’re buying Fleet because it is very good at what it does, not because we want to change it.”
Fleet CEO Bob Young believes the deal brings “a significant benefit” to the business, its partners, and landlord clients.
“Starling Bank will take over all of our funding, allowing us to focus on achieving our significant and ambitious lending and growth targets,” he adds.
“This is a natural progression for our lending business, with both Starling and Fleet sharing a very similar cultural fit.”
Starling landed a £50 million investment from GS Growth, Goldman Sachs’ growth equity arm, in April.
The investment is an extension of the bank’s £272 million Series D funding round, which it secured in March 2021 alongside a pre-money valuation of £1.1 billion.
