Houlihan Lokey Advises Titlestone Property Finance

Houlihan Lokey is pleased to announce the sale of Titlestone Property Finance Ltd (Titlestone) to Paragon Banking Group PLC (Paragon) and the sale of a related portfolio of development finance loans to Paragon and CarVal Investors GB LLP (CarVal) for a total consideration of c. £500 million. Titlestone and its related loans are owned by funds managed by Oaktree Capital Management L.P. (Oaktree). The transaction closed on July 3, 2018.

Titlestone is a leading provider of residential development finance in the UK. It directly services a range of small and medium-sized residential property developers and benefits from a highly regarded and experienced management team. To date, Titlestone has committed over £2.2 billion across more than 330 developments.

Oaktree is a global investment manager specialising in alternative investments with $121 billion in assets under management as of March 31, 2018. The firm emphasises an opportunistic, value-oriented, and risk-controlled approach to investments in credit, private equity, real assets, and listed equities.

Paragon is a specialist finance provider. It offers a range of savings and lending products in the UK through Paragon Bank PLC and invests in and manages loan portfolios through its subsidiary, Idem Capital. A FTSE 250 company, Paragon was established in 1985 and is listed on the London Stock Exchange.

Paragon considers the development finance market to be particularly attractive, with strong long-term growth prospects. The market benefits from strong underlying demand based on the shortage of housing in the UK and requires a specialist focus on customer requirements, risk assessment, and in-life portfolio management. The acquisition serves to extend the group's current development finance business, accelerating and broadening the proposition but maintaining Paragon's strong controls and credit focus. Further, the enhanced funding capacity and pricing benefits Paragon brings to Titlestone will help broaden its market opportunity.

Houlihan Lokey served as the exclusive financial advisor to Oaktree. This transaction highlights Houlihan Lokey's long-standing reputation and credentials as a premier advisor within the specialty finance sector.