15 Jan, 2008
Published: 13:10 Tuesday 15 January 2008
By: Daniel Grote, New Model News Reporter
Mortgage broker John Charcol has been put up for sale by its
private equity backers, with a price tag thought to be about
£50 million, after receiving a number of approaches.
The approaches come during a difficult time for the mortgage
market, with lending predicted to fall drastically next year in the
wake of the credit crunch.
But John Charcol chief executive Ian Kennedy claimed that it was
looking to sell from a position of strength, arguing that the
broker was benefiting from a demand for advice in uncertain
'Because of the credit crunch, it's more difficult to get the right
mortgage as a consumer so people are more inclined to seek advice,
and we are best placed to pick up more than our fair share of
that,' he said, arguing that it was benefiting from client brand
The company has appointed investment bank Gleacher Shacklock to
review its financing and ownership options. An auction is expected
to attract US and European bidders looking to enter the UK,
web-based mortgage aggregators, lenders looking to establish
distribution channels or life and general insurance providers,
Alan Lakey, partner at IFA firm Highclere Financial Services, said
John Charcol could be looking to diversify its business in order to
avoid bearing the full brunt of a downturn in the mortgage market.
But he was sceptical of Kennedy's claim that the credit crunch
would spur customers to seek mortgage advice at John Charcol.
'They, like all of the mortgage world, will suffer. There's bound
to be a lower volume, and brand awareness can't make up for all of
that,' he said.
Simon Tyler, managing director at Chase de Vere Mortgage
Management, said that current market conditions made it a good time
for John Charcol to sell, after a 'good year' for brokers.
The firm's backers may be looking to sell in the belief the market
would not get any better, he suggested.
'In fairness they have a good track record of selling at the top,'
he added, in a reference to Bradford & Bingley's £100
million purchase of the broker in 2000, before it was later taken
back into private hands at a loss.
Last year, John Charcol wrote £4 billion of new mortgages, a
growth rate of 20%, making it the UK's leading adviser on household