Victory Park Capital is looking to raise £200 million in an IPO on the London Stock Exchange. The proceeds will be invested through peer-to-peer platforms.
The prospectus says that the company will be targeting a net dividend yield of 8% and a net total return in excess of 10% per annum. Since its inception Victory Park Capital has completed about $2.9 billion of investments, which includes a wide range of loans to small and medium sized businesses, subprime, near-prime and prime consumers.
“VPC Specialty Lending Investments provides investors with access to an established and successful business and brand through its Investment Manager Victory Park Capital. The Company is targeting an attractive total return for shareholders comprising of dividend income and capital growth in this highly attractive and fast growing asset class. Victory Park Capital has experience in both direct lending and purchasing whole loans, as well as extensive knowledge of sector participants and the complex regulatory requirements needed to operate in the industry. With its significant sourcing network, Victory Park Capital Advisors has identified a strong pipeline of investment opportunities in which the Company may invest. 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.”
The IPO announcement also outlined which companies the Investment Manager already has existing relationships with and those that it is expected to gain exposure to. These include: Assetz Capital; Avant Credit; Borro; Elevate Credit; Fast Legal Funding; Kreditech; LendUp Global; Funding Circle USA and Funding Circle; OnDeck Capital; Prosper Marketplace; Square and Upstart. The company is aiming to be fully invested within six months from Admission.
Gordon Watson, Principal at Victory Park Capital, added:
"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. 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. At Victory Park Capital, we have invested or committed more than $1.7 billion in the specialty lending market since 2010 across twelve specialty finance platforms, several of these relationships are proprietary to Victory Park Capital. We expect to remain an active lender with our existing relationships and forward purchase agreements, providing scalable access to online platforms whilst remaining comprehensive and disciplined in our process of analysing and managing potential investments.”
Victory Park recently announced that it would be investing through Funding Circle. It will finance up to $420 million in loans to small businesses originated on the platform in both the US and the UK over the next three years. The company also recently committed to investing £150 million via the Assetz Capital platform over the next five years.
The Victory Park IPO shows the strength of interest from institutional investors in the P2P space. In January this year P2P GI successfully raised £250 million via a C-share offering. The value of its shares climbed by 14% between its IPO in May 2014 and early January 2015. It is well known that in the US the majority of investors on the biggest platforms, Lending Club and Prosper, are institutional investors. The success of P2P GI and Victory Park’s announcement is a sign that institutional interest is on the rise in the UK.