Shepherd Direct Receives £10m Investment From Business Growth Fund

A management team whose experience of leading and growing businesses spans First Direct, Egg and Mortgageforce has received a £10m investment from BGF (Business Growth Fund) to implement further growth plans for residential property services company Shepherd Direct, owner of estate agency CENTURY 21 UK.

Shepherd Direct, headquartered in Nottingham, manages more than 150,000 property valuations a year for major mortgage lenders including HSBC, First Direct, Lloyds and Santander, and provides surveying, lettings and estate agency services across the UK.

The £10m investment will be used to support organic growth and to acquire a minority stake in Stonebridge Mortgage Solutions, a network of independent mortgage brokers, to increase its footprint in the mortgage broking market.

Paul Gratton, former chief executive at Egg plc and a founding director of First Direct, set-up Shepherd Direct in the late 1980s as the UK’s first provider of property valuations to mortgage lenders via independent firms of surveyors. Together with Shepherd Direct’s now commercial director Rob Clifford, the pair also set-up, grew and successfully sold Mortgageforce. The management team is supported by non-executive chairman Jonathan Bloomer, the former chief executive at Prudential.

BGF, the UK’s most active provider of growth capital in small and mid-sized businesses, will become a long-term minority equity partner in the company. Ian Downing, an investor at BGF, takes a seat on the board.

Gratton, Group Chief Executive Officer, Shepherd Direct, said: “For more than 20 years we have built a broad and diverse business serving the UK residential property market. Shepherd Direct plays an important role in supporting a vibrant housing market, which is an essential component in increasing the availability of homes across the country. The regulatory environment is changing the way that lenders do business and this is generating new opportunities that we want to pursue. Now feels like the right time to accelerate our growth by bringing on board a new equity partner.

“We are looking to invest in entrepreneurial businesses to help them to grow and deliver synergies and stronger working relationships with lenders. We expect to continue in this vein with other strategic investments in the surveying and mortgage aggregation sectors."

Ian Downing, investor at BGF, said: “This is the first investment BGF has made into a property services company. We were attracted to Shepherd Direct by the strength of the management team who have significant depth of experience and contacts in the property and mortgage market. We look forward to seeing the team implement their growth plans and are delighted to be supporting them.”

Shepherd Direct operates four companies: Direct Valuations, Shepherd Chartered Surveyors, Central Lettings Solutions, and CENTURY 21, a global estate agency brand for which Shepherd Direct holds the Master Franchise in the UK.

The investment was led for BGF by Ian Downing, Gurinder Sunner and Aaron Baker. Shepherd Direct is banked by HSBC.

The advisers to the transaction were: * For Shepherd Direct: Legal - Browne Jacobson, Tax – PwC. * For BGF: Legal – Wragge Lawrence Graham, Financial – Mazars.