Dutch courage for Bluestone

The founder and venture capitalists who put the reverse mortgage outfit Bluestone Group together have sold 40 per cent of the company to Dutch bank ABN Amro and another 10 per cent to UK-based fund manager Cambridge Place Investment Management (CPIM).

The option to sell a major stake has quashed speculation the equity release product provider might list on the Australian Stock Exchange through an initial public offering.

Venture capital investor RMB Ventures will exit the group altogether by selling off its 20 per cent stake in the Sydney-based company, while company founder Alistair Jeffery will reduce his stake from 40 to 25 per cent. He has also extended his term as chief executive of the group for another three years.

CPIM will hold onto its original minority shareholding in Bluestone, as will UK-based Barclays Bank.

“The transaction ... represents both a liquidity event for existing shareholders and the start of Bluestone’s next phase of growth, and we are extremely pleased to be welcoming investors with the global reach of ABN Amro and the expertise of CPIM into the business,” Jeffery said.

The Bluestone purchase marks a second major play into Australia’s equity release market by ABN Amro, which released its own reverse mortgage product locally just a fortnight ago.

According to ABN Amro, there are currently 10 providers of equity release products in the Australian market, three of which are owned by Australian banks — St George, Commonwealth and Macquarie.

IOOF has since launched its own offering, and a reverse mortgage product is expected to be released soon by Greenway Capital, the group started by ex-Sagitta Rothschild managing director Peter Martin. Martin established Greenway after breaking with the consortium that formed another equity release provider, Rismark International. Last month Rismark signed a deal with ING’s Australian operation to distribute its equity release product.