Macquarie adds Homeloans to its mortgage portfolio

Macquarie Group has added to its portfolio of investments in mortgage management and distribution businesses with the purchase of 19.8 per cent of the mortgage manager Homeloans Ltd.

Macquarie, which disclosed the investment to the Australian Securities Exchange yesterday, bought the holding from Challenger Financial Group, which invested in Homeloans in 2007.

Challenger will continue to hold about two per cent of Homeloans.

Homeloans' other big shareholder is National Australia Bank, which has a 16 per cent holding.

Macquarie also owns shares in the aggregator AFG, Yellow Brick Road, broker Vow Financial and Century 21 Home Loans.

It has had an investment in AFG, which claims to have a 10 per cent share of the broker market, since 2001.

Macquarie may continue to treat its holdings as a portfolio of discrete investments or it may look to combine them in a new business structure. It did not comment yesterday.

Homeloans' chief executive, Tim Holmes, said he would be meeting Greg Ward, Macquarie's deputy managing director, next week.

Holmes said: "Challenger was a supportive investor, but it sold its other mortgage market holdings, and its presence on our register was no longer synergistic.

"We hope the link with Macquarie will advance our business. We have always been a multi-funder lender and would welcome a wholesale funding arrangement with Macquarie."

Homeloans' most recent financial report, for the six months to December, shows that the company has A$7.7 million of funds under administration. It made a net profit of $5 million for the December half-year - up $1.2 million on the previous corresponding period.

Macquarie paid 95 cents a share for the shares. Homeloans earned 4.71 cents per share in the December half-year.

Homeloans' stock price rose 10 cents yesterday to close at 85 cents.