Chamonix Private Equity and Electra Partners buy property manager, ending uncertainty for tenants in retirement homes and residential blocks
Britain's biggest property manager Peverel Group has been rescued from administration by two private equity companies in a £62m deal that saves 4,200 jobs and severs Peverel's ties with the Vincent Tchenguiz property empire. It ends 12 months of uncertainty for thousands of leasehold tenants in retirement homes and residential blocks managed by Peverel.
Chamonix Private Equity and Electra Partners have bought Peverel, whose holding companies collapsed into administration a year ago after property tycoon Tchenguiz ran up debts of £125m. All 4,200 employees will stay on, after Peverel traded profitably during its year in administration with Zolfo Cooper.
Peverel manages 59,000 retirement flats across 1,300 developments, including many McCarthy & Stone retirement homes, as well as 132,000 leasehold apartments in residential blocks. It has been criticised by tenants over poor service and excessive fees.
Chamonix and Electra have appointed Janet Entwistle, previously the managing director of BT Fleet, as chief executive of Peverel and Paul Lester, the former chief executive of VT Group, as chairman. Entwistle said her background working in service businesses would help. "I've swapped vehicles for properties," she said.
She admitted that there were serious issues that she would need to address. Last year a Guardian Money investigation highlighted a catalogue of accusations – refuted by Peverel – regarding rising service charges, maintenance failures, broken promises, excessive insurance costs and high exit fees from retirement homes.
"There are clearly a lot of concerns that people have and we will talk to them; we want to have a reputation for having excellent customer service," said Entwistle. "There clearly are some industry-wide issues that are of concern, and potentially some structural issues in the sector."
Crucially, she said, Peverel's debt has been slashed from £125m to just £25m. Bank of America Merrill Lynch was its main lender – but new debt financing is being provided by Royal Bank of Scotland.
Tchenguiz bought Peverel in 2007 with financial backing from Merrill Lynch, now part of Bank of America. Peverel's collapse came just days after he was arrested as part of a Serious Fraud Office investigation into the failure of Iceland's Kaupthing bank. The tycoon denied wrongdoing and it was reported recently that the SFO had apologised for Tchenguiz over the way it handled the investigation, admitting to "very regrettable errors". He has started a multimillion pound damages claim against the SFO.
The tycoon blamed Bank of America Merrill Lynch's "sudden" decision to demand repayment of a £124m loan, plus £11m interest.
Chamonix, an investment firm founded in 2006, had been working on the rescue deal for a year and brought in Electra, which is investing £33m of equity in Peverel. Andrew Hartley, one of Chamonix's three partners, said the joint venture would invest in improving IT, services, and expanding Peverel's telecare and telehealth arms. Careline, Peverel's telecare subsidiary, provides social alarm call monitoring through alarm systems wired up to people's homes or by wearing a pendant which activates if they suffer a fall. Telehealth, which is still in its early stages, provides monitoring of people living at home with cricial illnesses such as diabetes, heart conditions and high blood pressure.