With emphasis on diversity and gender equality in current times, it is most notable to see Nicola Horlick, the veteran fund manager, once dubbed the City’s (financial district of London) “superwoman”, has kickstarted the process to apply for a banking licence that will allow her peer-to-peer lending business to begin taking deposits.
“We are proceeding with our application,” said Horlick, who set up Money&Co in 2013.
“If we get the licence, we hope to launch the bank at the beginning of 2025.”
Horlick’s plan to obtain a banking licence was put on hold last year, following the death of her husband Martin Baker in November.
However, she said the application was now “back on track”. She is about to embark on a fundraising round to raise at least £50 million in regulatory capital, which would allow her bank to lend £300 million.
Horlick said her aim is to be lending £3 billion by the end of the first five-year period, which would require further fund-raising rounds.
The fund manager, who met the regulators last year about launching a bank, said she would be able to submit a final business plan to the Financial Conduct Authority and Prudential Regulation Authority once she had evidence of investor backing. The 62-year-old said backing would most likely come from family offices, sovereign wealth funds and other large institutional investors. She also expects interest from Middle Eastern investors.
“It will be a concentrated shareholder list,” said Horlick.
“But it is a difficult time to be raising money. The world is in a tricky place at the moment.” Peer-to-peer lending takes money from retail investors and lends it to individuals and companies.
The investors receive higher returns than if they had left their money in savings accounts while businesses can take on riskier loans.
However, peer-to-peer lending tends to generate lower returns for the firm than conventional bank loans do, as most of the profits are passed on to those who put the money in the pool.
Horlick said there was “a huge amount of tech work to do” to launch the bank, including building an app.
The bank, which will not compete with other digital banks, such as Revolut or Starling, will also have a separate brand from Money&Co, she added.
“We are not going to be doing anything wild here. We are not going to be having current accounts, which means it will be easier to run and to get to profitability,” she said.
A bank would offer cash ISAs and put investor money to work across three niche areas: finance for litigation, music publishing and agricultural roles.
“It will be more like an old-fashioned savings and loans bank, giving people good rates of interest on their savings and lending to the corporate sector,” said Horlick.
Her plans come after other peer-to-peer lenders have ditched businesses.
Zopa, the peer-to-peer platform set up in 2004, announced in December 2021 that it would exit this part of the business to concentrate on its banking operation.
The platform, which received a full banking licence in 2020, said peer-to-peer lending was no longer commercially viable.Meanwhile, Denmark based Lunar, which moved into peer-to-peer lending in 2021, sold that part of its business to Sweden’s Lendify in April in an all-stock transaction worth 100 million euros.
Lunar said operating a peer-to-peer platform and scaling the business would have required “significant investment”.
Horlick gained her Superwoman status during the 1990s for her ability to juggle a large family while running a multimillion-pound investment business.
She gained notoriety in the 1990s following a public spat with her bosses at Morgan Grenfell Asset Management.
Horlick was suspended from the firm when it was claimed she and some of her colleagues were looking to move to a rival.
She later resigned and set up SG Asset Management in 1997.
Andy Jalil
andyjalil@aol.com
The writer is our foreign correspondent based in the UK
Oman Observer is now on the WhatsApp channel. Click here
