Macquarie Mortgages has paid $15 million for Canadian mortgage provider, Cervus Financial Corp.
The acquisition is part of Macquarie Mortgages’ international expansion. Macquarie Mortgages already has businesses in Australia, in the United States and Italy.
In Australia, Macquarie is the exclusive funder for the Aussie Home Loans and Virgin Money Home Loans businesses.
“We believe Cervus is a fundamentally excellent business, which has recently experienced a deficiency in working capital. Macquarie is committed to providing the necessary capital to drive this business forward and is a committed long-term participant in the Canadian market,” Macquarie Banks’s executive director and Ggobal head of mortgages Frank Ganis said.
He added this is an excellent opportunity for Macquarie to continue to grow its international mortgages business.
“The Canadian mortgage market is a rapidly expanding and competitive market that has grown on average 6.4% per year for the past 15 years with the average growth rate accelerating to 9.7% over the last two years,” Ganis said.
Cervus was established in 2004 as an industry initiative with mortgage broker companies and financial providers. Since then, Cervus has carved an industry niche through introducing broker trailing commissions, which is new to the Canadian mortgage market.
In the last seven years, mortgage brokers in Canada have grown market share from 5% to 28%.
Ganis said that Mike Barrett, the current head of the Australian mortgage business would be re-locating to Toronto as head of Macquarie Mortgages North America.
Barrett has 18 years experience in the Australian mortgage industry and under his stewardship Macquarie’s loan book in Australia has grown to $20 billion.
Craig Thompson, previous head of business banking will become the new head of Macquarie Mortgages’ Australian operations.
By Adam Parsons
