Home equity release service provider Household Capital has increased its funding capability through a new commercial arrangement with Pacific Equity Partners Capital Solutions (PEP).
The new collaboration will see PEP invest in the mezzanine debt portion of Household Capital’s wholesale funding facility.
Household Capital will now have over $600,000 million available for its home equity release activities as a result of the deal.
“PEP brings deep experience in wholesale debt, structured finance and scaling business growth,” Household Capital chief executive Joshua Funder noted.
“We are delighted to secure PEP as a strategic partner and investor to help grow our business.”
He pointed out the new agreement will allow the firm to provide more Australians with access to the wealth tied up in their homes during the current challenging economic environment where high interest rates and inflation are resulting in significant cost-of-living pressure for retirees.
Household Capital chair Nick Sherry echoed these sentiments and noted the organisation will now have a greater capability to allow Australians to unlock their own wealth.
“The wealth of baby boomers is mostly tied up in their home and our mission is to help Australians live well at home,” Sherry said.
“Working together, we can help deliver widespread access to some of the $1 trillion in home equity wealth already saved by Australian retirees, providing certain, lifelong retirement funding at home. The family home has always been a missing link in the nation’s retirement funding system.”
In commenting on the new business association, PEP managing director Jack Haines praised Household Capital’s value proposition.
“Household Capital has pioneered innovative, scalable debt funding to meet the retirement funding and housing needs of an ageing population,” Haines noted.
“PEP identified Household Capital as a high-quality opportunity and is delighted to partner with a great company and to expand an important new category.”
PEP joins IFM investors as a mezzanine debt provider for Household Capital, with Citi maintaining the role of senior financier.