Australian Finance Group has announced its first two equity investments in broker businesses following its November move to offer its networks growth-enabling finance.
Australian Finance Group has announced its first two equity investments in broker businesses following its November move to offer its networks growth-enabling finance.
The West Perth-based group will take a non-controlling interest in Perth-based Lifespan Mortgage Services and Melbourne-headquartered Empower Health.
It comes after the group in December flagged it would offer to take non-controlling equity stakes across its network and appointed former Steadfast Group general manager of operations and acquisitions Vik Sukumaran to lead its newly minted broker investments team.
AFG chief executive David Bailey said the investment team was created after feedback from brokers pointed to a need for capital to support growth.
“The program is centred on a sustainable and disciplined investment approach, with the team engaging with our brokers to help them understand if the program suits their needs,” he said.
“Opportunities for brokers will only increase as the value and importance of the broker channel continued to grow.
“We are working with Empower Wealth and Lifespan Mortgage Services at a time when they evolve into the next big stage of their business growth.”
Lifespan Mortgage Services director David Moore said the investment would allow LMS to restructure ownership as a founder moves to retirement.
“This move means our team of leading WA mortgage brokers can confidently continue supporting our customers’ needs and financial goals for years to come,” he said.
“This will not only enhance our collective capabilities but also open new doors for innovation and growth.”
Research from the Mortgage and Finance Association of Australia found more than seven out of 10 borrowers in Australia sought out the services of a mortgage broker.
During the June 2024 quarter, mortgage brokers wrote 73.7 per cent of all new home loans, the second highest result on record a 6.5 per centage point increase from the same quarter the year prior.
That figure was up from 57 per cent in April 2020.
“Australians are living through a cost-of-living crisis with every dollar counting in household budgets,” MFAA chief executive Anja Pannek said.
Throughout the June 2024 quarter, the value of home loans settled by mortgage brokers surged to $18.64 billion, exceeding $100 billion nation-wide for the first time since records began in 2012.
MFAA’s data was backed by NAB, which revealed in its FY24 half year results that 64.9 per cent of the $39 billion in new Australian home loans were lodged by brokers – up six per cent on the year prior.
AFG has eight offices across five Australian states, employing over 300 people and supporting over 4000 brokers.
The group settles more than $60 billion in mortgage, asset finance, and commercial finance annually.
