Lowell Group is a leading UK consumer debt purchaser, acquiring portfolios of non-performing loans from blue-chip financial institutions, telecoms providers and utility companies. Lowell’s strong performance has been underpinned by sophisticated data analytics capabilities, giving the business a clear competitive edge in both portfolio acquisitions and collections.
Initial investment
2011
Sector
Financial Services
Initial transaction size
£350m
We had been researching the sub-prime financial services sector for several years and identified consumer debt purchase as a segment offering good structural growth and attractive underlying returns.
We saw in Lowell a proven and resilient market leader, delivering consistently high unlevered returns through the cycle, supported by a well-seasoned portfolio with significant cash generation. The business had a sophisticated data analytics platform, disciplined approach to compliance and customer management, and clear competitive advantage in a consolidating market.
We identified the opportunity to introduce a more flexible and efficient capital structure, which would provide it with more capital to expand its business model and drive growth.
We worked closely with management to educate the financing markets about the business, highlighting its significant cash generation and asset backing. We significantly lowered the cost of capital and improved returns through issuing a high-yield bond (a first for a European debt purchaser) and further using the bond market to support growth, creating a new source of funding.
Under our ownership, management delivered significant asset growth and expanded the company’s capabilities both organically and through acquisitions, almost trebling the size of the business.
Following the transformation of Lowell into a leading European credit management platform, we sold a minority stake in the company to Ontario Teachers in 2014 and fully exited in 2015 to GFKL Group.