The Ireland Strategic Investment Fund (ISIF) has sold its entire 33% stake in the country's largest non-bank lender, Finance Ireland, as part of a series of transactions at the firm.
International investment manager M&G plc has taken a significant equity stake in the business, while existing institutional shareholder Pimco has also increased its holding.
The transactions have also seen some smaller existing private shareholders reduce their stakes in the business.
As a result, it is understood that together the two large institutional investors now control 90% of the lender, with the management team led by founder Billy Kane holding the remaining 10%.
"This transaction is a huge vote of confidence not just in Finance Ireland and the management team but in the Irish economy, providing us with long-term capital to grow and expand our customer offering and execute our long-term growth strategy," said CEO, Mr Kane.
"M&G know our business well as funders of our residential mortgage book and we are delighted that they have taken this step to take a substantial equity position in our business at this time."
"The timing is also significant given the exit of Ulster Bank and KBC from the market as customers look for a new provider for their mortgage and for their business financing."
The company would not comment on the revised valuation for the firm, but industry sources indicated that it is now worth over €250m.
The deal will also see €50m in new equity being invested into the business to support its future growth.
This will include the expansion of its car finance business which has proven successful for the company.
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"Finance Ireland is the largest non-bank lender within the Irish market and is well positioned to take advantage of favourable structural changes as some banks withdraw from core areas of lending," said Will Nicoll, Chief Investment Officer of M&G's Private & Alternative Assets division.
"In addition to the growth potential of the business, the investment provides us with long-term funding opportunities as we continue to partner with the team to bring innovative financing solutions to Irish businesses and consumers."
The ISIF exit comes six years after it first invested in Finance Ireland and supported its growth in the meantime.
Last year new lending at Finance Ireland passed the €1 billion mark.
Finance Ireland was founded in 2002 by Billy Kane and today employs 170 people.
As well as specialising in car finance, it also lends into the commercial property, residential mortgage, SME, agri-lending and leasing finance sectors.
It is understood that ISIF made an over 50% return on its investment in Finance Ireland after investing about €45m and realising €70m on its exit.
