Australian financial services leader Macquarie Group today announced it has acquired Canadian-based mortgage lender Cervus Financial Corp. The newly capitalized company plans an aggressive push into Canada’s $660 billion growing residential mortgage market.

Cervus is a financial services company, established in 2004, that offers residential mortgages through a network of professional mortgage brokers who focus on building long-term relationships with borrowers. Brokers have access to Cervus preferred rates that are consistently lower than bank posted rates, that they in turn pass on to borrowers without the need to negotiate. Cervus compensates brokers with a unique trailer fee model that pays out a higher rate than its competitors over the term of the mortgage and it also rewards renewals on mortgages to encourage a long-term approach to service.

“We’re extremely pleased to have the support of Macquarie, an industry leader and the innovator of the same long-term broker model in Australia that we pioneered in Canada. We firmly believe that this approach to mortgage lending provides borrowers with the best rate over the term of their mortgage, while encouraging the broker to build a long-term relationship with his or her client,” said Grant MacKenzie, CEO, Cervus Financial, in a news release.

“Macquarie’s distribution skills and success in developing third-party and broker relationships is an excellent strategic fit with Cervus,” added MacKenzie.

Since 2004, Cervus Financial operated as a publicly traded company on the Toronto Stock Exchange and in June 2006 filed for creditor protection during which negotiations with Macquarie were finalized. As part of the deal, Macquarie, through a wholly owned subsidiary, has acquired 100% of Cervus Financial Corp for $12.5 million. In the short-term Cervus will continue to operate as Cervus. Current Cervus staff will become Macquarie employees.

Macquarie Executive Director and Global Head of Mortgages, Frank Ganis said, “The acquisition of Cervus is part of Macquarie’s global strategy of selectively entering markets where there is a genuine opportunity to add real value.”

In addition to being a leading mortgage provider in Australia, Macquarie also provides innovative home loan products in the United States (through Macquarie Mortgages USA Inc.) and Italy (through Macquarie Bank Italia).

Macquarie Executive Director, Mike Barrett, was previously head of the Macquarie’s Australian mortgage business and will be relocating to Toronto as Head of Macquarie Mortgages North America. Barrett has 18 years experience in the Australian mortgage industry, and under his stewardship Macquarie’s loan book in Australia has grown to $20 billion (AUD).