Detail on Lufax IPO

By Ryan Weeks on Thursday 26 November 2015

Alternative Lending

Lufax will look to raise around $5bn through a late 2016 IPO.

Early in the week we covered what may fairly be referred to as an fundraising “spree” within China’s sprawling peer-to-peer lending space. Dianrong is said to be looking to raise as much as $500m in a private round that will take place prior to March 2016. CreditEase’s consumer lending offering Yirendai is planning to raise $100m through an IPO on the New York Stock Exchange. And Lufax, one of the world’s largest peer-to-peer lending outfits, is looking to stage a “pre-IPO stake sale”.

We now have a little more colour as to what that IPO may look like. The Wall Street Journal’s Kane Wu and Rick Carew report that Lufax will look to raise up to $5 billion through the listing. We also learn that Morgan Stanley and Goldman Sachs will take point on preparing the launch, and that the platform intends to list in Hong Kong. Furthermore, Chairman Gregory Gibb has indicated that the funding will be used to expand the functionality of the Lufax platform beyond the facilitation of peer-to-peer loans. Mr. Gibb envisages Lufax becoming a dominant institutional platform, allowing large scale investors to buy and sell an array of financial assets.  

Lufax’s last fundraise – a whopping $485 round – was led by BlackPine Private Equity Partners, and valued the company at around $10 billion (a “decacorn”, in Silicon Valley-speak). The platform’s largest backer is Ping An Insurance, which controls a 47.5% stake in the company.  

The Lufax IPO sounds as though it will dwarf even the landmark listing of Lending Club, providing a fair reflection of the tremendous scale of the Chinese peer-to-peer lending market. 

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