The Birmingham office of investor Palatine Private Equity has struck its first trade since being launched last year in a £65 million deal.
The firm has backed East Midlands-based Westleigh Partnerships which was founded in 1985 by husband and wife team Chris and Judy Beighton and provides affordable residential property.
It has grown to become one of the largest housebuilders in the Midlands and focuses on the delivery of affordable homes to registered providers.
The Leicestershire-based business, which also has an office in Solihull, achieved sales of around £100 million in 2015/16 and employs around 300 staff.
The deal represents a partial exit for the founders and the business will continue to be led by Ian Jones, who joined 20 years ago, as managing director, with Mr Beighton remaining as chairman.
Palatine has invested £21 million for a significant minority stake.
Head of its Midlands operation Richard Thomas said: "In a fast-growing and attractive market, Chris, Ian and their team have built a business well-placed to benefit from the high levels of demand for affordable housing.
"The company has a strong and entrepreneurial management team who have demonstrated their ability to grow the business to now be a market leader across the Midlands for affordable housing development.
"We're delighted to be backing such a high quality business as our first deal out of Palatine's recently launched Midlands office.
The deal was originated and led by Phil Burns, managing partner at Clearwater International, and Austin Moore acted as legal advisers to Westleigh.
Palatine was advised by Catalyst Corporate Finance, law firm Gateley and chartered accountants RSM.
KPMG, CIL, GK Strategy and JLT also acted on the deal while debt facilities were provided by European Capital and AIB.
Simon Peacock, director at Catalyst, added: "We are delighted with this transaction which shows how important Westleigh is to UK housing development.
"Palatine's expertise will be of great benefit to the new board."