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Yellow Brick Road to fast-track growth following $7 million raise

Thursday, 20 December 2012 | By Michelle Hammond

Independent mortgage lender Yellow Brick Road has raised $7 million to fast-track its growth strategy, including a new range of YBR-branded mortgage products through the franchise.

 

Yellow Brick Road, founded by well-known Australian entrepreneur Mark Bouris in 2007, is a full service wealth management company, with branches in all of the major states.

 

Macquarie Group has taken an 8.3% stake in YBR, just one day after the Commonwealth Bank took control of “Aussie” John Symond’s Aussie Home Loans empire.

 

According to a statement released by YBR to the Australian Securities Exchange, Macquarie paid $6 million for 15 million shares at 40 cents, giving it an 8.3% stake in the company.

 

The remaining $1 million came from Coolabah Ventures, an entity controlled by the family of Christopher Joye, who is a strategic advisor and director with Yellow Brick Road.

 

Yesterday, YBR requested a trading halt and, at the time, expected shares to resume trading on Friday. The company’s shares rose 4.9% to 43 cents before the trading halt.

 

The news comes one month after YBR confirmed it would launch an “aggressive expansion into financial services” with the help of Macquarie.

 

It’s understood Macquarie will fund a new range of YBF-branded mortgage products through the franchise.

 

Bouris – who has suggested YBR could be the start of a new “fifth pillar” in banking – told SmartCompany the consolidation in the market means it is a perfect time to move, especially as Aussie Home Loans is no longer a candidate outside the big four.

 

Yellow Brick Road is preparing to open dozens of new locations in the next few years.

 

“We’re seeing big brands buying smaller brands, or consolidating their assets and using their market power to gain growth in what otherwise would be a tough market,” he said.

 

“We just needed more money so we could push harder into the market. Given we have the Macquarie products and the power in our business, it’s a good time.”

 

But Bouris isn’t stopping there, saying he also sees opportunities in the areas of life insurance and advice for small businesses.

 

“The small business market is doing it really tough right now; we’ve seen very little growth in small businesses,” he said.

 

“Small businesses aren’t looking for products, which is what the other banks are giving them, they want advice.

 

“They don’t trust banks; they want to talk to people about basic things like… getting a business plan right, getting cashflow right.”