Latitude Financial lands cornerstone investors ahead of planned IPO

Will the third time be the charm after two unsuccessful ASX floats?

Latitude Financial lands cornerstone investors ahead of planned IPO

Non-bank lender Latitude Financial has reportedly locked in a group of cornerstone investors ahead of an initial public offering scheduled to launch after Easter.

The news comes after Japan’s Shinsei bank agreed to buy a 10% interest in the non-bank lender, which is headed by Ahmed Fahour and owned by Kohlberg Kravis Roberts, Varde Partners and Deutsche Bank, according to a report by The Australian.

The prospectus for Latitude’s ASX float will reportedly be released within a few days.

Support for the cornerstone process came from four Australian institutional investors that had years-long history of engagement with Latitude, The Australian reported.

While Credit Suisse, Bank of America and Jeffries Australia have been engaged to run the listing, Insight Capital Advisors reportedly executed the cornerstone trade. Insight boss David Gray worked on Latitude’s two earlier IPO attempts, which both resulted in shareholders deciding to retain the business when they weren’t prepared to meet price expectations.

The cornerstone deal reportedly puts Latitude’s valuation at about $2.6 billion, which equates to a yield of around 6%.

Read more: Non-bank lender plans for potential ASX listing

Last week, Shinsei – which snapped up ANZ’s UDC Finance business in New Zealand last year – acquired its 10% stake for $300 million, which will be used to fund expansion plans, The Australian reported.

Latitude’s IPO plans were first reported in January. They come as investors search for high-yield opportunities in a low-interest-rate environment and the housing market booms amid the aftermath of the COVID-19 pandemic.

Latitude is made up of the assets of the former local GE Capital consumer business, which was snapped up by a consortium in 2015 for $8.2 billion, according to The Australian.