Property finance hub Lendinvest plots £500m London float | Business News

The online property finance hub Lendinvest is plotting a £500m stock market flotation that will provide a fresh test of investors’ faith in a fast-growing but volatile area of the non-bank lending market.

Sky News has learnt that Lendinvest, which was set up in 2008 and has so far lent roughly £2bn to help buy, build or renovate British homes, has appointed Lazard, the investment bank, to advise on its strategic options.

Sources said on Thursday that the company, which is run by chief executive Christian Faes, was likely to choose a syndicate of banks by the end of the month to oversee an initial public offering (IPO) that could take place as soon as this year.

They added that Lendinvest would seek a valuation of at least £500m in any public share sale.

A flotation could come within a year of the stock market debut of Funding Circle, Britain’s best-known peer-to-peer lender.

Funding Circle has endured a torrid ride so far, having priced its shares at 440p on their first day of trading.

On Thursday morning, they were trading at around 390p, having recovered from a much deeper slump in the aftermath of its IPO.

Lendinvest maintains that it is not a conventional peer-to-peer lender because the money that finances its loans is provided by institutions or high net worth individuals, rather than retail investors.

The company provides investors with a platform to invest directly in mortgages through a process that it claims is more efficient for both investors and borrowers because of its superior technology.

It recently moved into the buy-to-let mortgage market, and argues that as a secured lender offering loans at relatively conservative loan-to-value ratios, it represents a resilient play on the UK residential property sector.

Lendinvest most recently raised money in September last year, when it secured $39.5m of new debt and equity in a Series C funding round.

At the time, it described the fundraising as a pre-IPO exercise but insisted that it was in no rush to go public.

“Using technology, LendInvest is building a new kind of financial services business, and an extremely scalable platform, which is changing the way mortgages are funded and work in the UK,” Mr Faes said in September.

A source close to the company said a public listing was only one of a number of options that Lazard would help its board consider.

An IPO would be likely to emphasize to prospective investors what Lendinvest sees as a major opportunity to disrupt the UK’s £200bn mainstream mortgage market, which has long faced criticism for its cumbersome nature and inefficiency.

Any deal valuing Lendinvest at £500m would crystallise paper fortunes for Mr Faes and his co-founder, Ian Thomas, of about £175m each by virtue of their 36% stakes.

Employees own a further 7.8% of the shares, while external investors include the venture fund Atomico, the merchant bank GP Bullhound and Tiger Global, a prominent hedge fund which owns 1% of Lendinvest.

Mr Faes had previously raised the prospect of acquiring an offline lender in order to broaden its customer base.

A spokesman for Lendinvest declined to comment.

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