U.S. alternative investment manager Castlelake L.P. has agreed to provide a new £95 million ($121 million) financing line to Equifinance Ltd, bolstering the specialist lender’s capacity to originate second-charge residential mortgages across Britain.
The facility gives London-based Equifinance fresh firepower to serve prime and near-prime borrowers who seek to tap home equity without refinancing existing first-lien loans.
Castlelake said the transaction draws on its experience in Britain’s mortgage market and offers investors exposure to a niche segment it expects to expand.
Second-charge mortgages, also known as second-lien or junior loans, have attracted alternative credit funds as mainstream banks tighten underwriting in a high-rate environment.
UK Finance data show new advances in the sector rose more than 20 % year-on-year in the first quarter, while average balances have edged higher alongside property values.
Founded in 2012, Equifinance has originated more than £600 million in second-lien loans through a national network of distribution partners and employs about 70 staff.
The company plans to use the fresh capital to scale lending volumes and broaden its product suite.
Castlelake, which manages roughly $25 billion in assets and is allied with Brookfield Asset Management, has stepped up activity in European asset-backed credit.
Since early 2024, it has acquired or financed some $7 billion of residential and commercial real-estate loans, pursuing opportunities created by banks’ balance-sheet retrenchment.
The latest deal comes as UK housing-market transactions remain subdued but homeowner equity remains near record levels, creating demand for flexible, non-bank financing.
Equifinance said the funding will help it meet that demand while Castlelake gains a pipeline of seasoned, collateral-backed assets offering floating-rate returns.
Business News Asia