Commodity broker Marex is considering listing in New York as it looks to revive its plans for an initial public offering, in the latest sign that the London stock market is losing its lustre.
The London-headquartered group cancelled a listing in the UK capital in 2021 with a targeted valuation of between $650mn and $800mn, but is now assessing both cities for a share sale that could take place early next year if market conditions are appropriate.
Chief executive Ian Lowitt said in an interview that the likely continuation of strong earnings next year meant that Marex’s private equity owners were beginning to revive exit plans and that these could include a listing.
“What we are seeing in 2023 creates optionality for shareholders. The business might come up for IPO,” he said. “It’s something that people are thinking about given the performance of the firm.”
Market participants expect the valuation of the broker, which has been controlled since 2010 by JRJ Group, a private equity firm set up by two former Lehman Brothers investment bankers, to be $1.6bn to $1.7bn, although advisers have yet to be formally appointed.
In response to follow-up questions, Marex said that it saw the possibility of a listing taking place in either London or New York.
The company, which puts on trades and derivatives hedges for big commodity producers and consumers, pulled its listing plans two years ago because of weak market conditions; at the time a throng of newly listed companies, including food delivery group Deliveroo, underperformed.
The decision by Marex to put New York in the running as the listing venue further stokes debate over the competitiveness of the London market that has been ignited by several companies — including CHR, the world’s largest building materials group — ditching or reconsidering the UK capital.
On Wednesday, Holiday Inn owner InterContinental Hotels Group warned that the UK stock market was “not a very attractive place” for listed companies.
The revival of Marex’s listing plans came after it delivered record annual earnings in 2022, increasing pre-tax profit by more than half to $121.7mn on revenues of $702mn, as the financial services group benefited from buoyant commodity markets and higher interest rates.
The broker has aggressively expanded its financial products and geographies through several acquisitions in recent years. These have helped it grow its US business to the same size as that in Europe and also to expand in the Middle East and the rest of Asia.
Lowitt said he expected profits to keep increasing next year since those figures would include ED&F Man Capital Markets and selected businesses from OTCex, which it completed acquisitions of early this year.
“We’ve laid the foundations for a terrific 2023 and beyond,” he said.
However, 2022 was not all plain sailing for Marex, which is one of eight companies trading in the ring of the London Metal Exchange, as it had to contend with market dysfunction during the nickel trading crisis in March last year.