Bluestone’s mortgage book sold

Australian listed Challenger has bought non-bank lender Bluestone Home Loans New Zealand mortgage book for $597 million.

Tuesday, January 7th 2025, 10:27AM

by Sally Lindsay

The deal was signed off by the Overseas Investment Office on November 26.

In its recently released decision, the OIO says consent was granted as the Challenger NZ HoldCo1 met the investor test criterion. While the applicant is a New Zealand company, it is ultimately owned by Challenger, an Australian management firm.

Challenger, described as one of Australia’s most active fund businesses, has a capitalisation of $4.1 billion and at the end of June last year managed $A127 billion in assets.

Bluestone Home Loans quit New Zealand in August last year. Following a strategic review the company decided the New Zealand specialist non-bank
lending market was well-serviced, and the opportunity and market fit for it was too small.

It stopped accepting new home loans at the end of August, but continued servicing existing clients.

Australia-based chief executive Mark Jones said at the time the market was not of sufficient scale to make a meaningful difference to Bluestone’s business and was a subscale business in a sense size and the margins were tight.

Challenger will migrate clients’ loans with Bluestone Home Loans NZ, New Zealand Home Loans or Select Home Loans NZ to its operation, with no change for most borrowers.

Repayments will continue as normal.

According to the OIO office Bluestone Mortgages NZ is 60% owned by investors in America, 24% in the Cayman Islands, 7% Singapore and 9% by various others, while Challenger NZ HoldCo1 is 53% owned by investors in Australia, 22% America, 15% Japan, 5% UK and 5% by various others.

Two months after Bluestone pulled out of New Zealand, another substantial non-bank lender, Resimac, also shut up shop here for similar reasons. There are market rumours circulating that Resimac might resume operations in New Zealand but a call to its Australian headquarters hasn’t met with any answers.

Tags: Bluestone Challenger