Financial services giant Legal & General (L&G) has bought a large interest in a major British home builder from Lloyds Banking Group, marking the group's first direct investment of this kind.

L&G, which provides protection, annuities, savings and investment management products in the UK, said in a statement on Monday morning that it has bought a 46.5% equity stake in CALA Group for £65m.

Meanwhile, European real estate firm Patron Capital will be an equal partner with an identical interest, alongside management who will take a 7.0% share.

The acquisition, financed by £140m of equity and £70m of debt, values CALA at £210m.

L&G said that it has identified direct investments as a "key driver of growth": "The acquisition forms part of a strategy to target socially useful projects (including housing, education, transport and energy sectors) that deliver high rates of return and fit L&G's financial and strategic criteria," the company said.

CALA is said to have a premium market positioning in the more "affluent" areas of the UK such as the Home Counties, the Cotswolds and around Glasgow, Edinburgh and Aberdeen.

"At our preliminary results we identified direct investment as one of our five drivers of growth. We are delighted to announce an acquisition in this area as our first M&A transaction for some time. We will continue our evolution as a group by combining our strength in organic growth with selected bolt-on acquisitions, which satisfy our strategic and financial criteria, across each of the five areas identified," said L&G's M&A and Strategy Director Wadham Downing.

"We are very excited to have invested in CALA alongside Patron and CALA's experienced management team. We are confident that with this combined expertise and the financial resources that both Patron and L&G bring, we can build many more homes in the UK and help CALA grow and realise its potential."

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