Kelso buys sub-prime company

London-based buyout firm Kelso Place Asset Management has bought UK sub-prime mortgage lender TML Financial Solutions, a subsidiary of Kensington Group, for an undisclosed sum.

Kelso has bought TML Financial Solutions from Kensington Group as the latest example of increasing activity in the sub-prime sector.

TML will now trade under its previous name, The Mortgage Lender. The company lends around £400 million in mortgages and employs around 200 people.

John Drinkwater, managing director of Kelso Place said The Mortgage Lender had been unable to deliver its full potential while restricted to offering products only from Kensington. He added: “As an independent entity, with significant infrastructure in place, and a more diverse and attractive product offering, we are confident the business can deliver significant growth.”

David Titmuss and Simon West are managing director and finance director of The Mortgage Lender. It was founded in 1999 and acquired by Kensington in 2002.

This is the latest in a string of deals involving the sub-prime market after Cerberus $800 million purchase of US sub-prime lender in April.

Kelso has ten companies in its portfolio including Smythson of Bond Street, a stationery and leather goods brands and Anya Hindmarch, a luxury designer brand. Kelso closed its third £100 million (€147 million, 199 million) fund in October last year.