Banking group invests £274m in development finance strategy
Paragon Banking Group has splashed out £274m as part of its strategy to diversify into specialist lending markets.
It has acquired Titlestone, a residential development finance provider, and a £226m portfolio of development finance loans. Both the company and the loans were ultimately controlled by Oaktree Capital Management.
Solihull-based Paragon began residential development finance lending in 2016 and has so far advanced £118m with a pipeline of a further £130m.
It believes the market has “strong long-term growth prospects” and benefits from “strong underlying demand based on the shortage of housing in the UK”.
Nigel Terrington, chief executive of Paragon, said: “This acquisition demonstrates our continued progress in diversifying the Group’s income streams into specialist lending markets.
“The UK development finance market represents an excellent long-term opportunity and Titlestone will enable us to accelerate our growth in this area.”