UK mid-market private equity firm Duke Street has acquired a 58 per cent controlling interest in the Marlin Group, a purchaser and manager of consumer debt specialising in litigation-based recovery.
Marlin acquires debtor books made up of credit card and unsecured personal loan debt. In this asset class, £20.8bn (€23.6bn) became delinquent in 2009, with creditors outsourcing £13.1bn (€14.9bn) of this to third party collectors, including £2.7bn (€3.1bn) sold to debt purchasers such as Marlin, according to Duke Street.
The company chases “litigation quality” debt in the high-balance segment of the market, reclaiming money through lawsuits.
Duke Street partner Miles Cresswell-Turner said, “Marlin has the potential, with funding and operational help from Duke Street, to become a clear category killer among litigation-focused debt purchasers. The debt purchase sector is set to recover sharply in the next two to three years, so this investment is an opportunity to build a focused platform with strong upside characteristics.”
The financial services sector is a key area of focus for Duke Street. One of its earliest successes was building European CDO business Duchess before selling to Mass Mutual.
Last month the group agreed to acquire a 69 per cent shareholding in the Payzone Group, Europe’s largest consumer payments acceptance network, for €104m.
Since December, Duke Street has sold four portfolio companies: beauty products group Simple, pensions adminstrator Xafinity and hospital operators Affinity and Groupe Proclif. The sales returned €211m to the firm’s investors.
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