BGH Capital is believed to have been running the ruler over the Kohlberg Kravis Roberts-backed Pepper Money Limited (ASX:PPM), according to sources in the market. It comes after DataRoom reported in April that BGH had been looking at buyout opportunities among non-bank financial groups. Sources say that the Melbourne-based private equity fund had been doing a lot of work two to three months ago on Pepper, which has a $549.7 million market value, but activity had ceased in the past few weeks.

Working for the listed Pepper Money is understood to be investment bank Citi, which sources say had been working to drum up competitive tension with other private equity firms. The valuations of non-bank lenders have been hit hard in the rising interest rate environment and slowing economy. Pepper Money listed as being worth $1.3 billion during the pandemic by Kohlberg Kravis Roberts, which retains a 61% holding.