Household Capital, a leading Australian provider of home equity retirement funding, announced that it has closed a $37.6 million Series C capital raise, with Genworth Financial Mortgage Insurance becoming a strategic partner in the business.
Genworth joins Legal & General UK (L&G) as strategic investment partners in Household Capital.
Household Capital’s Chief Executive Officer, Dr Joshua Funder (pictured), welcomed Genworth as a strategic investor, saying the fundraising allows Household Capital to continue to meet growing demand from Australian retirees seeking to access responsible, long-term funding to meet their retirement needs.
“Genworth understands Australia’s home ownership market and has deep expertise in mortgage and risk evaluation,” said Dr Funder.
“Home equity retirement funding plays a critical role in meeting the needs of an ageing population, particularly as many Australian retirees have insufficient funds in their pension accounts because compulsory superannuation payments by employers only started in 1992.”
Genworth’s Chief Executive Officer, Pauline Blight-Johnston, said, “Genworth is delighted to have entered a strategic partnership with Household Capital. This investment demonstrates a significant step toward achieving our purpose of accelerating financial wellbeing through home ownership.
“Genworth is committed to helping Australians through a range of solutions along all stages of their property journey. Our strategic partnership with Household Capital, together with L&G’s deep expertise in equity release, will enable us to deliver on this commitment to Australia’s retirees.”
Lisa Griffin, Chief Commercial Officer – New Ventures at Genworth, will join the Household Capital board of directors.
Lorna Shah, Managing Director, Retail Retirement, Legal & General, said, “We welcome Genworth in joining Household Capital as a strategic partner. The Australian equity release market is extremely promising, and Household Capital is at the forefront, expanding the retirement funding and housing options available to Australian retirees.”
Dr Funder said that with the conclusion of the Series C capital raise, Household Capital is now focused on growing its share of the home equity retirement funding market and improving access to long term retirement funding options to people throughout Australia.
“Together with our strategic partners Genworth and L&G, Household Capital looks forward to providing financial assistance for retirees and delivering on our mission to help Australians ‘Live Well At Home’.”
“There are currently around five million Australians, or about a fifth of the population, who are retired, and this group has more than a $1 trillion in home equity available today,” said Dr Funder.
“Home equity is the missing link in the nation’s retirement funding system. We work closely with financial advisers and brokers to deliver their clients access to capital and enhanced income in retirement. The high level of service we provide to financial advisers and their clients underpins our success.”
Drawing on home equity provides older Australians with flexibility and choice. It provides them the opportunity to get themselves ‘retirement ready’: financially, by refinancing an existing mortgage or other debt, or renovating their home to live comfortably and safely at home. Importantly, during times of market volatility, retirees can draw on home equity rather than income producing assets, preserving the longevity of those assets.
A number of Household Capital’s clients who are well established for retirement, draw on their home equity to be the bank of mum and dad, to help their children or grandchildren buy their first home, pay out a mortgage or cover educational expenses.
On 13 October 2022 Household Capital was announced as placing second (to global finance giant Visa) in the AFR Boss Innovation Awards in the Banking, Superannuation and Financial Services.
In December 2021, Household Capital completed a $300 million financing package provided by Citi, one of the world’s biggest banks, and IFM Investors, the industry super-owned global fund manager.