Reverse mortgage sector poised for growth as more seniors intend to remain in their own homes
The Ontario Teachers’ Pension Plan Board (OTPPB) has entered into an agreement to acquire HomeQ, the parent company of HomeEquity Bank which has a reverse mortgage portfolio of over $5 billion.
Blake Cassels & Graydon LLP is acting for the OTPPB. Torys LLP is the legal adviser to HomeQ.
HomeEquity Bank provides reverse mortgage services, designed to help Canadians aged 55 and older to access equity in their homes. Last June, the bank announced in a press release that its portfolio under management has surpassed $5 billion. The bank also said that the reverse mortgage sector is poised to grow by another $1 billion in 2021 alone because of the overwhelming desire for Canadians to remain in their own homes as they age.
The OTPPB is an independent organization administering Canada’s largest single-profession pension plan, with $277.7 billion net assets under its management. According to Karen Frank, senior managing director of equities at the OTPPB, HomeEquity Bank suits the organization’s growing portfolio of leading financial services firms. “We believe the company has a high-quality management team, a solid value proposition for consumers and room to grow their business given Canada's aging population as well as the increased attractiveness of staying in your own home as you age," said Frank in a press release.
HomeEquity Bank’s parent company, HomeQ, is managed by Birch Hill Equity Partners Management, Inc., a Toronto-based mid-market private equity firm with over $4 billion in capital under management.
Steven Ranson, President and CEO of HomeEquity Bank said, “I want to thank Birch Hill for its unwavering support for HomeEquity Bank over this past decade. Our partnership provided a reliable source of capital so that HomeEquity Bank could help more Canadians access the equity they built in their homes and live in the place they love."
Ranson also expressed excitement about the value that Ontario Teachers’ will bring as the bank continues to serve Canada’s rapidly growing retired population.
Following the required regulatory approvals, the deal is expected to close in the first half of 2022.