Can Recludo's co-ownership model make a splash on the public markets?
Recludo, the mortgage broking investment first headed by chief executive Tim Brown, has raised the prospect of floating on the Australian Securities Exchange (ASX).
Former Macquarie banker Brown revealed the plans in an interview with the AFR, where he outlined Recludo’s ambitions to acquire more brokerages.
Recludo is aiming to acquire 50 businesses; an IPO could potentially raise $150 million of firepower to deploy onto the market. It currently has eight brokerages under its wing.
“We’re very focused on growing the businesses and making sure they’re attacking the right niches to maximise the value of the loans they’re writing,” said Brown, who was on the judging panel for the 2025 Australian Mortgage Awards. “We call this – using an old Macquarie saying – moving them off the dance floor and onto the balcony.”
Recludo pitches a co-ownership model that promotes revenue generation and long-term growth, including providing succession-planning strategies for brokers looking to exit the market.
“I think it’s going to come at a point when we will need to go to the (public) market to raise more, and that’s in our strategy," Brown told the AFR.
There are currently more than 22,000 brokers in Australia – one of the highest per-capital concentrations in the world. Many brokers operate as sole operators, but mounting challenges – including administrative costs, regulation, clawbacks, payroll tax and market competition – are raising the likelihood of industry consolidation.
“Any impact to a small business’ bottom line will inevitably drive further consolidation,” Them Lam, head of sales and distribution at mortgage aggregator AFG, recently told MPA.
AFG has itself ramped up its investments in brokerages, having acquired stakes in five businesses since November 2024.
“Rising fixed costs, such as regulatory compliance, technology and insurance are other factors driving consolidation, and the introduction of a payroll tax and the additional cost this brings to small businesses would accelerate that trend as scale becomes increasingly important,” said Lam.
The wealth gap
Recludo co-founder Ash Playsted warns of a persistent “wealth gap” in the broking industry.
“Despite dedicating their careers to helping clients plan their financial future, one of the most common patterns I see across our industry is that brokers often apply far more discipline to their clients’ long-term financial outcomes than they do to their own,” he said in comments sent to MPA.
Playsted has built and exited multiple mortgage businesses over the years, and he has seen some consistent patterns emerge.
“The greatest financial risk facing many mortgage brokers is the wealth gap quietly forming between the life they want next and the capital their business will ultimately deliver,” he said. “Mortgage brokers apply this thinking every day with clients: define the income required, apply a drawdown rate, and work backwards to the capital needed. What is striking is how rarely brokers apply the same thinking to themselves.”
As predominantly founder-led businesses, a brokerage’s valuation is often tied to the founder’s ongoing involvements, explained Playsted.
“In many brokerages the founder remains the primary driver of revenue, the central relationship holder with clients and referral partners, and the decision maker across operations and strategy,” he said.
Recludo believes it has the knowhow to tackle these existential issues – but it might need to convince the market first.
