Macquarie invests in specialist UK vehicle leasing business
London, 24 Jan 2019
- Macquarie makes initial £1.2 million equity investment in XL Group
- XL Group’s portfolio comprises more than 700 short-term contract hire vehicles
- Macquarie gains further exposure to the UK’s specialist vehicle finance sector
- Investment allows XL to expand in the continually evolving mobility market place
Macquarie Corporate and Asset Finance (Macquarie) – the specialist asset finance division of Macquarie Group – has announced an initial £1.2 million equity investment in the UK vehicle leasing business XL Group. The company specialises in the short-term contract hire of executive cars and supercars to both corporate and private clients – with over 700 vehicles currently in its fleet throughout the UK controlled from its head office in Lincolnshire, England.
Macquarie’s Vehicle Finance team will partner with XL’s management team to expand existing operations, not only through the equity investment but with an initial £10 million operating lease facility which may be extended to facilitate the anticipated growth of the business.
Macquarie has been active in the car leasing industry since 1998 and has built up a portfolio of over 600,000+ vehicles globally and is a leading vehicle financier in Australia. The investment in XL enables Macquarie to increase its foothold in the UK mobility and specialist vehicle finance sector and provides XL with access not only to Macquarie’s global leasing expertise, but also direct funding for its fleet and rapid forecasted growth.
Julian Liddy, Regional Head of Asset Finance in EMEA, explained: “Having become a leading provider of vehicle finance in Australia, we are now looking to selectively expand the business into new markets and saw great potential to partner with XL in the UK. A key element of our vehicle finance strategy is based on the migration of customers from a ‘finance to own’ to a ‘finance to return’ model which XL already operates through its short-term contracts – and which we believe could be deployed across similar markets.”
Gordon Young, Head of Vehicle Finance for Macquarie in EMEA adds: “We are always trying to identify new ways to benefit from the evolving disruption currently being experienced in the UK vehicle finance market. Consumers are changing the way they want to finance vehicles moving towards a “car subscription” service. We want to be part of that shifting sentiment and XL has developed a business model that services this growing segment.”
Martin Walker, XL’s founder commented: “This deal is a milestone in the company’s evolution and I am delighted to have such a global financial powerhouse on board to fulfil our vision for this business”.
Steve Hampson, Chairman of XL, said: “This investment presents an exciting opportunity for XL to expand and fortify its position as market leader in this specialist market place. We are looking to secure additional avenues into market in early 2019 and aiming to bring the numbers of cars on lease to over 5,000 in the shortest timeframe possible. Our vastly experienced team working together with Macquarie, who bring with it over 20 years of global experience in vehicle finance and an ability to understand customer behaviour and market demands, will enable XL to further accelerate our plans for growth, both within the UK and internationally”.
About Macquarie Group
Macquarie Group Limited (Macquarie) is a diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities. Founded in 1969, Macquarie employs 14,869 people in 27 countries. At 30 September 2018, Macquarie had assets under management of £305.6 billion. For further information, visit www.macquarie.com
About Macquarie Corporate and Asset Finance
Macquarie Corporate and Asset Finance (CAF) consists of an asset finance business which provides specialist finance and asset management solutions globally, and a principal finance business which provides flexible primary financing solutions and engages in secondary market investing.
CAF services clients in over 50 countries and manages an asset and loan portfolio of £18.7 billion as at 30 September 2018. With over 20 years of vehicle finance experience, Macquarie has become a leading provider of finance leases, novated lease agreements and secured car loans in Australia.
Founded in 2006, XL is a UK based SME focused on the short-term (6-18 months) premium vehicle rental market. XL currently has a fleet of 750 vehicles on short term rentals to SMEs and individuals. XL operates throughout the UK from its freehold site in Boston, Lincolnshire. The business model is predicated upon the ever-changing mobility market place and the desire to offer freedom from the traditional longer-term contracts and ability to react to taxation, environmental and legislative changes in the automotive world. For more information, visit www.xlltd.com