Legal & General Group (L&G) has acquired a 40% stake in Pemberton Asset Management Holdings as part of its plans to launch a new direct lending platform to European businesses.
The acquisition will enable Legal & General to accelerate its participation in the direct lending market and provide a new source of institutional funding to corporate over the long term.
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The deal will see the creation of a new direct lending platform for institutional investors, through which Pemberton will provide much-needed financing such as loans and private placements to mid-market companies in the UK and Europe.
As part of the deal, L&G has committed an initial 250 million ($338 million) for Pemberton’s direct-lending platform with the intention of making further significant commitments.
Pemberton will lend money to companies with a turnover of between 100 million and 1 billion.
Macfarlanes has advised Legal & General on the transaction, while Pemberton Asset Management was advised by Dechert.
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By GlobalDataL&G group chief executive Nigel Wilson said that the firm has invested £4 billion this year in UK infrastructure and housing.
Paul Stanworth, managing director of Legal & General Capital, said: "The UK and Europe have been too dependent on bank financing, and this impacts particularly on businesses wishing to invest and expand.
"Creating a new channel to deploy longer-dated institutional money in the mid-market sector will help drive economic recovery at a time when bank balance sheets are constrained, as well as creating a further asset class for direct investments by insurance companies and other institutions," he added.
Symon Drake-Brockman, managing partner at Pemberton, said: "Through our platform, we will enable the mid-market to access funds from established institutional investors at a time when the number of loans available from banks is in decline."
