Bluestone Home Loans sold to ASX-listed Challenger for $597m

Residential mortgage lender Bluestone Home Loans has been sold. Photo / NZME

Specialist non-bank residential mortgage lender Bluestone Home Loans has been sold to Australian Stock Exchange-listed Challenger for $597 million.

The Overseas Investment Office cleared Challenger to buy Bluestone on November 26. Last month, it released that decision.

Challenger has a A$4.1b market capitalisation and is one of Australia’s most active fund businesses, managing A$127 billion in assets as of June 30 last year.

That company issued a question and answer sheet and told Bluestone clients: “Your loan with Bluestone Home Loans NZ, New Zealand Home Loans or Select Home Loans NZ will be migrated to Challenger Mortgage Management.”

Challenger Mortgage Management said it specialised in the administration and daily servicing activities of Australian and New Zealand home loans and indicated no change for most borrowers.

“If you pay by direct debit, your loan repayments will continue as normal. No action is required on your part,” Challenger told Bluestone borrowers.

The Overseas Investment Office said Bluestone Mortgages’ ownership was 60% American, 24% Cayman Islands, 7% Singapore and the rest various overseas entities.

Challenger is 53% Australian, 22% American, 15% Japanese, 5% British and the rest various entities.

Applicant Challenger NZ HoldCo1 is a New Zealand-registered company ultimately owned by the investment management firm listed on the Australian stock exchange.

“Bluestone Mortgages NZ is a non-bank lender operating in Australia and New Zealand. It is exiting the New Zealand market. Consent was granted as the applicant met the investor test criterion,” the Overseas Investment Office said.

In August, media reported Bluestone was conducting a strategic review of its business here.

The company said the New Zealand market was well serviced and the “opportunity and product/market fit for us is small”.

Bluestone said it had helped more than 13,000 New Zealanders buy or refinance their properties.

Mark Jones, Bluestone Homes Loans chief executive, announced the business would leave this country.

Last month, the Herald reported on the top 10 most valuable deals by foreigners trading in New Zealand assets in the year to September.

The most valuable deal of that period was also a mortgage loan book.

That was a $1.25b sale where HSBC’s New Zealand mortgage and home loan book was sold to an Australian business.

The 47% Asian banker sold to Pepper New Zealand, 45% Australian-owned.

The second-largest deal was the $700m sale of a wealth advice and asset management business.

FirstCape Group said it would bring together JBWere New Zealand, Jarden Wealth, Harbour Asset Management, and BNZ Investment Services with 113 advisers and a combined $44b worth of funds under management, advice and administration.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.