TP ICAP
Group Plc, the world’s largest inter-dealer broker, is considering a potential
listing of its Parameta Solutions data unit in New York rather than London,
signaling a potential setback for the UK capital markets.
TP ICAP Mulls New York
Listing for Data Unit, Bypassing London
The
company, which connects clients in wholesale financial markets, cited better
liquidity and a more robust ecosystem of specialist investors and analysts in
the US as key factors influencing this decision. TP ICAP also noted that 95% of
Parameta’s revenue is dollar-denominated, making a Wall Street. listing more
reflective of the unit’s business operations.
Parameta
Solutions, which provides over-the-counter financial data and analytics to
institutional clients, generated £97 million in revenue and £39 million in
adjusted earnings before interest and tax in the first half of 2024. This
represents approximately 8% of TP ICAP’s total revenue.
While the
potential US listing is under consideration, TP ICAP CEO Nicolas Breteau
emphasized that no final decision has been made. “There is, of course, no
certainty about either a public offering or its location. We will update on
progress, as and when appropriate.”
Strong Financial Results
The news
comes as TP ICAP reported
strong financial results for the first half of 2024. The company saw a 32%
surge in pretax profit to £120 million, while revenue edged up to £1.14
billion. The firm also announced a £30 million share buyback program and
maintained its interim dividend at 4.8 pence per share.
“Our focus
on diversification is paying off,” Breteau commented on the results. “Group
revenue increased by 3% in constant currency, building on last year’s strong
performance. We delivered record H1 profits with adjusted EBIT up 9%.”
The E&C
division of the company experienced an 8% rise in revenue. Meanwhile, the
Global Broking segment continued to hold its position as a market leader, even
though its revenues remained unchanged from the previous year.
TP ICAP’s
operations also include Liquidnet, a private trading operator that
became part of the Group following an acquisition over three
years ago. For
Liquidnet, revenues grew by 8%, thanks to an increasing market share in the US
and EMEA.
London Loses IPO Battle to
New York
TP ICAP’s
consideration of a New York listing for Parameta adds to the ongoing debate
about London’s competitiveness as a global financial center. As the TP ICAP spokesperson commented for
Bloomberg, the United States has a “large financial data sector, with an
ecosystem of specialist investors and analysts, who have a deep understanding
of the industry.”
Even London’s biggest inter-dealer broker is looking to the US as it considers an initial public offering of a lucrative data business, the latest sign that the City is struggling to compete with New York for equity capital markets activity https://t.co/FnenIn9FMo
— Bloomberg UK (@BloombergUK) August 7, 2024
As a
result, the company joins a growing number of British entities opting for
listings outside the country, favoring the United States.
An example is Marex Group, which announced in March its intention to debut
on Nasdaq under the ticker “MRX”.
In 2023, the
US completely dominated the IPO market, while activity in London fell by
36% during the same period. In the record year of 2021, IPOs raised $20
billion, but the values have seen a significant decline over the past two
years. Last year, the UK’s IPO market did not even exceed the value of $1
billion.
Despite
these challenges, TP ICAP confirmed it has no plans to change the group’s
primary listing, which remains in London. The company’s shares responded
positively to the news, rising 7.8% to 227.5 pence during Wednesday’s London
trading.
This article was written by Damian Chmiel at www.financemagnates.com.
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