Peer-to-peer investor targets £200m City float
PEER-TO-PEER investor VPC Speciality Lending Investments is eyeing a £200m fundraise on the London Stock Exchange when it floats shares on 17 March.
The company will use the cash raised to invest in opportunities in the alternative lending market, it announced yesterday.
The lender, owned by US-based Victoria Park Capital, is wooing investors with a dividend yield of eight per cent, and will target total returns over 10 per cent per year “once the proceeds of the issue are fully invested” in peer-to-peer lenders.
Peer-to-peer lending lets people lend to other individuals or small businesses through online platforms. Since April, VPC has been regulated by the FCA, and typically offers returns of around five per cent.
VPC Speciality Lending Investments will capitalise on what it says is the burgeoning alternative finance market.
“In the US, UK and Europe, the specialty lending market through peer-to-peer and direct lending electronic platforms is expected to continue to benefit from structural advantages following the financial crisis and resulting bank regulation, particularly in Europe and the US,” said Victory Park Capital principal Gordon Watson.
“Restrictions have been imposed on certain types of lending to both consumers and small businesses by banks where lending is in decline while specialty lending platforms continue to grow.”
The Peer-to-Peer Finance Association said lending platforms made loans of around £1.24bn last year in the UK, pushing the total value of borrowing from the sector to £2.1bn, nearly double the figure reached at the end of 2013.
“We look forward to executing on our strict investment strategy and we are targeting to be substantially fully invested within six months of admission in a portfolio diversified across geography, product and structure,” said Victory Park Capital partner and co-founder Brendan Carroll.
VPC intends to publish its prospectus this morning with its roadshow running until around 12 March, it hopes to commence trading around 17 March.
Jefferies is acting as sole broker, sponsor and bookrunner on the listing.
BEHIND THE DEAL
MARK JAMES – JEFFERIES
1 James joined Jefferies as part of its acquisition of RBS Hoare Govett in 2012, where he was the sole managing director of its investment funds team.
2 He has advised on a number of initial public offerings in recent years, including The Renewables Infrastructure Group and Starwood European Real Estate Finance.
3 A managing director at Jefferies, James has more than 16 years experience during which he has specialised in alternatives assets, closed-end funds, investment trusts and permanent capital vehicles.
Also advising…
James is working on Jefferies team for the VPC listing along with managing director Gary Gould and senior vice president Alex Collins.