UK equity funds back challenger banks ahead of next IPO wave

UK investors back challenger banks

With a growing number of challenger banks listing in the UK this year, UK managers have embraced the opportunity to find a ‘purer' play on the country's financial sector than larger institutions.

Five-year-old bank Aldermore has announced plans to list on the London Stock Exchange later this year, while Lloyds spin-off TSB raised £1.3bn in a June flotation, and OneSavings Bank also raised £134m via its own listing. The trend was confirmed last week when Lloyds announced plans to sell a further 11.5% of TSB. Virgin Money, meanwhile, is also reportedly set to announce flotation plans in the coming days. Another recent entrant into the sector, Metro Bank, has raised close to £390m through a private share offering and is expected to make its initial public offering in 2016. Whi...