Niche financial firms to test waters with Aim flotations

Two UK niche financial services firms are braving the choppy stock market with initial public offerings that they hope will tempt investors even as several larger bank floats have been pulled.

The Mortgage Advice Bureau, a home loan broker network with adjusted pre-tax profit of £5.2m last year, and Haversham, an investment company that will make acquisitions in the UK and European motor sector, on Monday announced plans to list on the London Stock Exchange's Aim market in the coming months.

Their plans follow a 3.3 per cent gain last week for the Aim 100 index, after seven straight weeks of losses. The index is down 21.3 per cent for the year.

Volatile markets and lacklustre demand from investors after a spate of IPOs have led the sponsors of challenger banks Aldermore and Virgin Money, and motor vehicle BCA Marketplace to pull their flotations. Luxury retailer Jimmy Choo priced shares at the bottom of its planned range.

But the brokers who bring companies to market argue that investors still have appetite for specialist companies that can differentiate themselves.

"Institutions are looking for differentiation and value and continue to look for companies with good management, a record and a clear strategy," said Martin Green, a managing director in corporate broking at Canaccord Genuity, which is MAB's nominated adviser.

"MAB is the only to be listed intermediary network in its space that you could invest in presently. That makes it a bit different and ticks all the other boxes as well," he added.

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Peter Brodnicki, chief executive and co-founder of MAB, said: "Following the Mortgage Market Review which introduced the requirement for advice on residential mortgages, the number of borrowers seeking advice from intermediaries is increasing."

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Haversham was set up by Marwyn Value Investors and Avril Palmer-Baunack - the former chief executive of Universal Salvage and Autologic, and past executive chairman of Stobart Group - to buy and develop businesses.

It is raising £30m through the Aim listing. Marwyn has put in £8.9m with the rest coming from a group of institutional investors including Invesco, Artemis, Aviva and Schroders. The funding will be used to help it buy companies with enterprise values of between £250m and £1bn in the automotive, support services, leasing engineering or manufacturing sectors.

Haversham's private equity like model means that it will compete for assets with many of the private equity sponsors who have had mixed success in bringing IPOs to market this year.

Ms Palmer-Baunack said: "A lot of IPOs that failed this year have come out of the private equity houses [ . . .] and a lot of them hadn't delivered when they were on the public market."

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