And then more could follow
Banking, insurance, wealth could all go
- 2018 Commercial Lenders Roundtable
- Top 10 Brokerages 2018
- 2018 Brokers on Aggregators
Non-bank lender Pepper Group is preparing to take its second run at the ASX in less than six years, with Pepper ANZ CEO Mario Rehayem and chief financial officer Therese McGrath pursuing funds for the company’s planned initial public offering.
The last time Pepper floated, it lasted less than two and a half years on the ASX before KKR’s credit arm, in conjunction with a couple of its big shareholders, snapped up the business, according to a report by The Australian Financial Review.
This time, however, Pepper is focused only on Australia and New Zealand, with global concerns like a Korean bank, a UK lending services business and loan origination in Ireland gone.
Pepper ANZ is being pitched to fund managers as a leading non-bank lender with $15 billion in assets as of December 31, AFR reported. The group originated $4.6 billion in loans over the 12-month period, $3.4 billion in mortgages and $1.2 billion in asset finance.
Pepper ANZ has 229,000 customer accounts across more than 5,300 active brokers, but only a 0.5% share of Australia’s $2.16 trillion mortgage market and 5% of the addressable asset finance market.
While the numbers are bigger than when Pepper was taken private in 2017, the proportional split between mortgages and asset finance loans is similar. The loans also fell into the same broad categories: prime, near prime (borrowers with a minor adverse credit event) and specialist (borrowers whose credit was impacted by a life event such as a divorce).
Read more: Non-bank lender plans for potential ASX listing
Pepper ANZ told prospective investors that 59% of last year’s mortgage originations fell into the prime category, while 34% were near prime and 7% were specialist. Around 55% of mortgages came through brokers managed by aggregator groups like Aussie Home Loans and AFG. Around 40% were sold under white label agreements, and 5% were direct sales.
While PepperANZ offered plenty of information on its loan book, there was a dearth of financial details, AFR reported. Funds are expecting Pepper and its lead managers – Credit Suisse, Goldman Sachs and RBC Capital Markets – to provide financials and a more detailed pitch in the coming months. Reunion Capital Partners and Gilbert + Tobin are advising Pepper on the float.
There has reportedly been little said so far about what Pepper ANZ could be worth as an ASX-listed company. When the company was bought out in 2017, independent expert Grant Samuel estimated the value of Pepper Australia and NZ at $440 million to $480 million.
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