A PUBLIC listing would boost the credibility of whichever peer-to-peer lender moves first, but would also bring a host of challenges, an investment expert has warned.
Talk of an initial public offering (IPO) from one of the main P2P players has returned in recent months, with Rhydian Lewis, chief executive of RateSetter, confirming that the firm was looking to list at an in-house event for investors.
Speculation surrounding an imminent listing has grown following the firm’s appointment of City heavyweight Paul Manduca as chairman, although Lewis cautioned that a stock market flotation “is some way away”.
Last year Zopa co-founder Giles Andrews described a public listing as a “natural route” for the business, while James Meekings, co-founder of Funding Circle, said earlier this year that an IPO may become a “by-product of what we do”, but emphasised there were no immediate plans.
Adrian Lowcock, investment director at Architas, said that for a relatively new industry like P2P, a listing would add a certain kudos and indicate that the sector is coming of age. Lowcock added that an IPO would not only offer an opportunity to raise capital to fund further growth, it would also help bring it to the attention of a wider range of investors.
“However, being the first should not be the priority of a business as being unprepared to be floated will bring challenges to the business,” he cautioned.
“The extra work required for a listed company can always run the risk of distracting management from the actual business. In addition, while the extra focus on reports and accounts brings transparency, that could result in some hard questions.”