TP ICAP Group Plc, the world's largest inter-dealer broker, is considering a potential listing of its Parameta Solutions data unit in New York rather than London, signaling a potential setback for the UK capital markets.

TP ICAP Mulls New York Listing for Data Unit, Bypassing London

The company, which connects clients in wholesale financial markets, cited better liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and a more robust ecosystem of specialist investors and analysts in the US as key factors influencing this decision. TP ICAP also noted that 95% of Parameta's revenue is dollar-denominated, making a Wall Street listing more reflective of the unit's business operations.

Parameta Solutions, which provides over-the-counter financial data and analytics to institutional clients, generated £97 million in revenue and £39 million in adjusted earnings before interest and tax in the first half of 2024. This represents approximately 8% of TP ICAP's total revenue.

While the potential US listing is under consideration, TP ICAP CEO Nicolas Breteau emphasized that no final decision has been made. “There is, of course, no certainty about either a public offering or its location. We will update on progress, as and when appropriate.”

Strong Financial Results

The news comes as TP ICAP reported strong financial results for the first half of 2024. The company saw a 32% surge in pretax profit to £120 million, while revenue edged up to £1.14 billion. The firm also announced a £30 million share buyback program and maintained its interim dividend at 4.8 pence per share.

“Our focus on diversification is paying off,” Breteau commented on the results. “Group revenue increased by 3% in constant currency, building on last year's strong performance. We delivered record H1 profits with adjusted EBIT up 9%.”

The E&C division of the company experienced an 8% rise in revenue. Meanwhile, the Global Broking segment continued to hold its position as a market leader, even though its revenues remained unchanged from the previous year.

TP ICAP's operations also include Liquidnet, a private trading operator that became part of the Group following an acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term over three years ago. For Liquidnet, revenues grew by 8% thanks to an increasing market share in the US and EMEA.

London Loses IPO Battle to New York

TP ICAP's consideration of a New York listing for Parameta adds to the ongoing debate about London's competitiveness as a global financial center. As the TP ICAP spokesperson commented for Bloomberg, the United States has a “large financial data sector, with an ecosystem of specialist investors and analysts, who have a deep understanding of the industry.”

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 https://t.co/FnenIn9FMo

— Bloomberg UK (@BloombergUK) August 7, 2024

As a result, the company joins a growing number of British entities opting for listings outside the country, favoring the United States. An example is Marex Group, which announced in March its intention to debut on Nasdaq under the ticker “MRX.”

In 2023, the US completely dominated the IPO market, while activity in London fell by 36% during the same period. In the record year of 2021, IPOs raised $20 billion, but the values have seen a significant decline over the past two years. Last year, the UK’s IPO market did not even exceed the value of $1 billion.

Despite these challenges, TP ICAP confirmed it has no plans to change the group's primary listing, which remains in London. The company's shares responded positively to the news, rising 7.8% to 227.5 pence during Wednesday's London trading.