Ontario Teachers’ Pension Plan (OTPP), a private equity investor, has bought AIG United Guaranty, Canada’s 3rd largest default mortgage insurance provider.
Default mortgage insurance providers such as AIG United Guaranty, CMHC and Genworth provide insurance that covers the lender against mortgage default, and is mandatory for mortgages with a loan to value ratio (LTV) of 80% or more. This enables consumers to buy houses with down payment of as little as 5%.
OTPP announced:
“We believe the mortgage insurance industry in Canada to be an attractive market, and that United Guaranty Canada is well positioned to grow its market position,” said Erol Uzumeri, Senior Vice-President, Teachers’ Private Capital. “The company has a strong management team, and Teachers’ is prepared to support the growth of the business.”
United Guaranty Canada, headquartered in Toronto, is the second largest private mortgage insurance provider in Canada with assets of C$274 million and total equity of C$127 million as of September 30, 2009.