Innovative investment partnership for regional building society
4 September 2017 • Corporate
The Cambridge Building Society has secured a £15m investment from the Cambridgeshire County Council Pension Fund to support more people in buying their own home maintaining its momentum as a successful, growing mutual organisation.
Through the issuance of Core Capital Deferred Shares, The Cambridge will receive an injection of capital that will support further growth of the business, lending more to local borrowers and investment in products and services for existing members. This partnership is the first of its kind between a building society and local authority in the UK.
The Cambridge approached the Pension Fund, administered by LGSS, with the opportunity that will boost the Society’s capital by 25% while giving the fund a trusted place to invest its members’ money.
Stephen Mitcham, Chief Executive of The Cambridge said: “This partnership marks the start of an exciting new era in the Society’s long history and will provide a bright and sustainable future for all existing and future members.
“The Cambridgeshire County Council Pension Scheme is the ideal partner for The Cambridge as we share the vision of delivering long-term benefits for residents and the local economy. This synergy replicates the original founding of The Cambridge which was Cambridge people coming together to help themselves and others.”
Councillor Roger Hickford, Chairman of the Cambridgeshire County Council Pension Scheme said: “The Cambridgeshire County Council Pension Fund welcomes the opportunity to invest in a long-established Cambridge-based business and in supporting local people in buying local homes. We applaud The Cambridge on this innovative share issue which will provide a stable and attractive investment return for our pension fund members.”
Peter Burrows, Finance Director of The Cambridge said: “The capital injection we receive will let us build on recent investments in the business as well as allowing us to lend more in the form of mortgages.
“We provided record lending last year of £265m and this investment will allow us to continue our strong performance. In real terms it’s going to allow us to support 1,000 more families over the next two years to buy their own home.”
The structure of the investment preserves The Cambridge’s status as a member-owned, mutual organisation as the shares come with only one vote regardless of how many an investor buys.
Simon Warburton, finance lawyer at Mills & Reeve, the law firm who advised The Cambridge, said: “We were delighted to be able to support The Cambridge in this ground-breaking partnership with such significant local benefit. We relish the opportunity to help clients’ secure alternative sources of finance and meet their increasingly complex challenges.”