Gill Akaster creates company to provide mortgage finance

Plymouth law firm Gill Akaster has established a company with a 15 million loan book to provide mortgage finance to commercial borrowers throughout the country.

Peninsula Finance is the latest financial services practice to be hived off from a law firm.

It has secured a revolving facility from Lloyds TSB and will offer commercial loans ranging from 25,000 to 600,000.

The new company will not initially be listed on the Stock Exchange.

The group, formed by the 12 partners of Gill Akaster, has acquired the existing mortgage portfolio managed by the firm's commercial department.

The practice of law firms offering private mortgages used to be prevalent in areas like the south-west, where farmers preferred to lodge money with their solicitors rather than banks, which would then be used for loans to others.

However, this has died out in recent years.

Hugh Michelmore, Gill Akaster's senior partner and the chairman of Peninsula, said: 'Our aim is to expand and develop the company by a steady and significant increase in the size of the mortgage portfolio.

'Peninsula Finance will operate nationally and we confidently expect it to become one of the major UK players in the market for commercial lending.

It is already one of the leading commercial finance providers within the south-west outside the major clearing banks.'

Partner Robert Howard splits his time between fee earning and running Peninsula.

He said the hiving off was for regulatory ease but also facilitated arranging external financing.

Gill Akaster acquired the management of a private mortgage portfolio in 1996 following its merger with Geoffrey Stevens & Co.

The firm manages the mortgage portfolio on behalf of around 550 people, with funds under management of around 15.8 million.

Peninsula inherits a portfolio of more than 250 loans to commercial businesses.

Eversheds in Cardiff advised Peninsula on its prospectus issue.

David Harrison, a former senior HSBC executive, has been recruited to the board to give additional finance and banking experience.

Neil Rose