Cabot Square Capital, financial services private equity investor, has acquired Blue Motor Finance, the car finance provider.
Blue Motor Finance will offer auto finance backed by equity investment from Cabot Square Capital and a new £200 million long term funding facility.
The company has agreements with fifteen major dealer networks and brokers that will use Blue Motor Finance’s funding and plans on significantly expanding its introducer relationships in the coming months.
Blue Motor Finance will offer funding across the entire UK prime auto finance market, giving both dealerships and consumers a major new choice in a market that has suffered from a loss of competition after the withdrawal of numerous finance providers in the aftermath of the credit crunch.
Blue Motor Finance specialises in new and used car finance, provided through dealerships, for consumers with good quality credit.
Blue Motor Finance is headed by executive chairman - and former main board director of instalment credit firm Lombard North Central, Bob Jones.
Jones said: “The partnership with Cabot Square Capital and the new funding line will help us to meet the demand in the market for a finance provider that can address the needs of all prime borrowers, and give dealerships quick and consistent decisions. Our industry-leading systems allow us to do just that.”
“We believe that the £200m of capacity we currently have in place is just the beginning, as there is a lot of pent-up demand in the market for prime motor finance. We’re hoping to help dealers unlock sales that might previously have been beyond their reach due to a lack of finance or due to delay in getting an indication of appetite from potential funders.”
“We have maintained excellent relationships with dealer networks and motor finance brokers across the UK, and those relationships will be the key to expanding our reach. In this we are extremely fortunate to have the services of Tony Ordish as Sales Director and Peter Critchley as Development Director, two of the most well regarded executives in the auto-finance industry.”
Tarun Sharma, investment director at Cabot Square Capital, says: “Dealerships and consumers in the motor sector have been restricted in their finance options since the credit crunch, and that has created a substantial opportunity for a new prime credit provider to step into the market.”
“Blue Motor Finance has the industry connections and platform to become one of the market leaders in car finance in a short period, and we are excited to partner with this experienced management team to help them to achieve that.”
Cabot Square Capital manages funds on behalf of long-term institutional investors and is currently investing its fourth fund. Its investments include LDF, working capital loans and asset finance for professional services firms and SMEs; Henry Howard Finance, sales finance for SME business equipment vendors; Asset Alliance, commercial vehicle finance; Centric – invoice finance to SMEs, subsequently sold to Shawbrook, and Signature Private Finance, bridge lending to small property developers.