Private Equity News & Analysis

Rutland makes 2.7 times return from pawnbroking

Rutland has ended its three year investment in pawnbroking, making a 2.7 times return from the sale of Svensk Pantbelaning to Preato Capital a year after larger European business Harvey & Thompson was floated on AIM.

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The Rutland Partnership, a UK turnaround specialist, has sold Swedish pawnbroker Svensk Pantbelaning to Preato Capital for £5.8 million (€11.8 million, $8.6 million).

Rutland acquired Svensk Pantbelaning for £3 million in September 2004, at the same time as it bought European pawnbroker Harvey & Thompson from Cash America International. Rutland fully realised its investment in H&T through a listing on AIM in May 2006.

Rutland received over £50 million from both companies, representing a return of 2.7 times the initial investment.

Svensk Pantbelaning has 12 outlets across Sweden.  Rutland has reshaped the senior management team of the pawnbroker since taking over the business.

Preato Capital also owns Finland’s largest pawnbroker, Helsingin Pantti-Osakeyhtiö.

Rutland’s Paul Cartwright told PEO that the recent problems in the debt markets have had little negative effect on his firm’s business: “In distressed debt we’re starting to see more interesting opportunities, with dealflow better as problems happen in larger companies. Some companies we buy have very few earnings and so leverage is unavailable, while others are underperforming and then we can leverage.”