Barclays Private Equity has made 2.3 times its original investment in Preferred Mortgages, the UK lending business, by selling its 66% stake in the company to Lehman Brothers.

The deal has generated an annualised return of 40% for Barclays, which backed the £270m (€385m) managment buy-out of the business in 2001. This compares with a 15% average annualised return by European buy-out funds over the last decade.