Interactive Investor eyes £2bn London stock market float

Interactive Investor is eyeing a London stock market listing in 2022 which could value the DIY investing platform at up to £2billion. 

After posting strong growth in the pandemic, the UK’s second biggest DIY investment platform has started talks with several investment banks as it eyes a London listing, according to Sky News. 

It would join major rivals Hargreaves Lansdown and AJ Bell on the stock market if it floats and while no formal decision has been made, an IPO could see the Manchester-based firm valued in the range of £1.5billion and £2billion.

Interactive Investor, which is part owned by US private equity firm JC Flowers, has been mulling a flotation for some years. Chief executive Richard Wilson told This Is Money in 2019 of his ambition to follow rivals Hargreaves Lansdown and AJ Bell to become a listed company. 

Earlier this year the company appointed Gordon Wilson as a non-executive director as part of its IPO plans.

The possible listing in 2022 follows a year in which investing platforms have seen a rise in customers as those with savings and more time to spare became retail investors for the first time.

Hargreaves Lansdown has proved a runaway stock market success story, with its shares rising 265 per cent over the past decade, compared to a 52 per cent rise for the FTSE All Share Index.

AJ Bell shares floated at 160p in December 2018 and immediately soared 38 per cent. Today they stand at 429p – some 168 per cent above their IPO price.

Interactive Investor has said it has seen ‘record levels’ of new customers and asset inflows during the pandemic, with rival AJ Bell reporting similar increases. Interactive Investor now boasts over 400,000 customers and £55billion of assets under administration.

Interactive Investor stands out among investment platforms because it operates a flat-fee monthly subscription model. It charges £9.99 per month on its standard plan and gives investors back £7.99 in the form of a free monthly trade.

In its most recent results for the first half of 2021, the company reported a 19 per cent rise in net revenue year-on-year to £76.1million and a 33 per cent rise in new clients to 31,667.

The company has been on an aggressive acquisition spree in a bid to take on investing giant Hargreaves Lansdown, the UK’s largest DIY investment platform.

Earlier this year, Interactive Investor snapped up Equiniti’s share dealing, Isa and Sipp accounts for £48.5million. That followed its deal to buy rival Share Centre for £62million last February, and its acquisition of Alliance Trust Savings in 2019 and of TD Direct Investing in 2017.

The steps towards an IPO come in the wake of a review by Lord Hill, which recommended measures to make it easier for private investors to access IPOs.

Interactive Investor boss Richard Wilson has been among those agitating for retail access, alongside Andy Bell and Chris Hill of AJ Bell and Hargreaves.

Earlier this year the chief executives wrote to City minister John Glen saying retail investors were ‘excluded from the majority of IPOs via the LSE.’

‘For too long UK listings have been the preserve of financial institutions and we urge you to consider the rights of retail shareholders in relation to IPOs,’ they said. 

They noted that between October 2017 and October 2020, private investors were invited to take part in just 24 out of 352 IPOs on the main market and Aim.