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Peer2Peer Finance News | September 18, 2019

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RateSetter boss confirms IPO hopes and plans to increase asset-based finance

RateSetter boss confirms IPO hopes and plans to increase asset-based finance
Anna Brunetti

RATESETTER’S chief executive Rhydian Lewis (pictured) has confirmed the peer-to-peer platform is eyeing an initial public offering (IPO) as a pivotal step to solidify its position as an “investor brand”.

He also said the business and consumer lender would not expect or be interested in any takeover approaches from banks as it focuses on floating the business.

“We hope to list the business – as an investor brand, we this would be natural step – but this is some way away,” Lewis said at an in-house event the firm organised for its own investors.

“We don’t hope to sell the business to a bank, and we don’t think that banks would necessarily consider buying a major P2P business at present.”

Read more: Don’t team up with banks just yet, RateSetter’s chief exec warns

The platform has recently announced two senior hires, appointing asset management veteran Paul Manduca as non-executive chairman and filling its chief risk officer seat with risk management and acquisition finance specialist Joanna Wright.

While a City lawyer said high-level hires are a key element within a firm’s strategy to get “investor ready” and banking sources told Peer2Peer Finance News that RateSetter may be targeting 2019 as the IPO date, the platform has indicated that it is still far from materialising any actual plan.

Meanwhile, the firm said it is looking to step up its asset-based lending, increasing the portion of loans that are secured against tangible assets or other type of securities as opposed to personal guarantees.

“We take a physical asset where we can, but I think that personal guarantees do work at the smaller end of business lending,” said Lewis.

“I expect that more and more of our loans will be secured in future as we scale up and do more asset finance.”

Lewis also commented on the potential risks faced by the sector, pointing to platform failure as the main event that would shake confidence in the industry.

Hover, platforms that have had to wind down have guaranteed an orderly process so far, he said, and those that may realise their activities are not profitable could re-gear towards different business models.

“It’s interesting to note that we have already seen some platform failures, and they’ve actually been quite orderly,” he said.

“In addition, some models may prove to be unsustainable and we may see some morphing towards something that has been proved to work.”