Legal & General Group Plc (LGEN) bought a 40 percent stake in Pemberton Asset Management Holdings Ltd. as the U.K.’s third-largest insurer seeks to provide direct lending to European businesses.
L&G committed an initial 250 million euros ($338 million) for Pemberton’s direct-lending platform, the London-based insurer said in a statement today, without disclosing the price of the transaction. The capital will enable Pemberton to offer loans and private placements to U.K. and European companies with revenue of 100 million euros to 1 billion euros.
Insurers including L&G and Friends Life Group Plc are looking to direct lending as they seek investments to match long-term liabilities and generate higher yields as banks struggle to fund increased demand for corporate loans in the aftermath of the financial crisis.
“The U.K, and Europe have been too dependent on bank financing,” Paul Stanworth, managing director of Legal & General Capital, said in the statement. “Creating a new channel to deploy institutional money in the mid-market sector will help drive economic recovery at a time when bank balance sheets are constrained, as well as creating a further asset class.”
L&G, the U.K.’s largest manager of pension assets, has invested about 4 billion pounds ($6.8 billion) in U.K. infrastructure and housing as it seeks long-term investments to match its liabilities.
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