British Brokerage TP ICAP Favors New York Listing for Data Unit

(Bloomberg) — Even London’s biggest inter-dealer broker is looking to the US as it considers an initial public offering of a lucrative data business, the latest sign that the City is struggling to compete with New York for equity capital markets activity.

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TP ICAP Group Plc is considering listing its Parameta Solutions data unit in New York rather than its hometown because it believes it will get better liquidity in the US than the UK, the firm said in an emailed statement. Listing in the US is also more reflective of Parameta’s business, since 95% of its revenue is dollar-denominated, the company said.

The US also “has a large financial data sector, with an ecosystem of specialist investors and analysts, who have a deep understanding of the industry and drivers of valuation,” the company said in response to questions from Bloomberg.

It would be the latest blow for London’s capital markets, which have seen some companies — including CRH Plc and Flutter Entertainment Plc — choose to switch their main listings to New York. The moves have hurt London’s reputation as a listing location for internationally-focused companies.

A representative for London Stock Exchange Group Plc declined to comment.

One Option

TP ICAP counts many of the largest Wall Street banks as clients and is considered the world’s largest inter-dealer broker, according to its website. Parameta Solutions offers independent data on markets including rates, credit and equities.

Listing on a US exchange is just “one option being considered” for the data, analytics and post-trade business and no final decision has been made, TP ICAP said in a statement on Wednesday. Shares of the company earlier soared to their highest level in more than three years as the broking giant also reported results for the first half that largely met analyst expectations and it announced it would commence a £30 million buyback.

“There is, of course, no certainty about either a public offering or its location” Nicolas Breteau, chief executive officer of TP ICAP, said in the statement. “We will update on progress as and when appropriate.”

TP ICAP’s deliberations come in the midst of a highly-charged debate about London’s future that got its start when the English chipmaker ARM Holdings Plc chose to go public in New York rather than London.

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Still, there has been an improvement in sentiment around London IPOs in recent months after online fashion retailer Shein confidentially filed papers for what would likely be the UK’s capital biggest listing in more than a decade.

British regulators last month overhauled their listing rules in an effort to make London more competitive with cities around the world. Businesses will be allowed to carry out more activities without putting them to a shareholder vote and can also have two classes of shares — a structure often favored by entrepreneurs or early stage investors looking to retain influence.

TP ICAP is not considering any change to the group’s UK listing, the company said in its emailed statement.

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