The fintech investor takes control of its third fintech business.
Fintech investor TruFin has taken control of specialist funder Vertus as part of its strategy to build “a stable of niche lenders”.
The London-listed investor converted a £3.65m loan into shares to gain control of Vertus, which provides cash to allow independent financial advisors to sell their businesses to rivals, said in a stock market statement. It also made an additional payment of around £355,000 to take a 51 per cent stake in the Gerrards Cross-based firm.
TruFin said: “Vertus is a funding provider to the independent financial adviser sector and the directors consider Vertus to be best in class with significant opportunities arising from a sector trend of consolidation.”
The fintech investor also owns Oxygen Finance, which sells early payment systems to the private and public sector and Satago Financial Solutions, which provides working capital to small businesses.
‘New debt facility’
TruFin said it expects Vertus will secure a larger debt facility that will allow it to provide new facilities of over £20m “in the coming twelve months representing annualised growth in excess of 200 per cent”.
Vertus currently has a loanbook of over £6m, and posted a pre-tax loss of £219,000 on sales of £600,000 in the year to the end of June.
Vertus chief executive Matt Marais said: "Having worked with TruFin for the last 24 months we are very pleased at their decision to convert into becoming a majority shareholder. This, combined with the new debt facility we are expecting to secure shortly, will ensure that we can service the significant demand for our highly attractive proposition.”
TruFin was listed on the FTSE’s junior Aim market last February and has a market value of around £66m. It competes with rival investor Augmentum Fintech, with a valuation of around £105m.
TruFin chairman and chief executive Henry Kenner said he supported Vertus’ efforts to “continue to scale their lending pipeline”, adding that the business is “a highly attractive niche lender".
The investor added that independent non-executive director Peter Whiting, chief financial officer Raxita Kapashi and chief operating officer Jason Rogers will all leave the business by the end of July, resulting in head office saving of around 35 per cent.
In April, TruFin sold its entire stake in peer-to-peer lender Zopa to the London-based alternative investment manager Arrowgrass for £44.5m, as part of “its strategy of growing its businesses and subsequently exiting them when it is in the interests of the company's shareholders”.