Deloitte eyeing independent IPO sponsor status

23 December 2014 2 min. read

In 2013 Deloitte voluntarily lost its independent IPO “sponsor” status. Less than two years later, the Big 4 firm has changed its mind, and is eyeing a return to the recovering IPO market.

The status of independent sponsor allows a third party to act as independent advisor for IPOs, which involves co-ordinated due diligence and the development of prospectus for the offering as well as communication between the London Stock Exchange (LSE), the issuer and the UK listing authority, which is required for premium listings on the LSE. In general, the role of independent sponsor is filled by banks, acting as a deal bookrunner. Independent organisations, such as Rothschild and Lazard also have the ability to act as sponsors.

As it stands, of the Big Four consulting firms, only PwC is empowered to act as independent sponsor. Deloitte, according to the UK Listing Authority, lost its status in September 2013, an authority spokesman saying: "Deloitte voluntarily stood down from acting as sponsor in 2013."

Deloitte - IPO

Yet just over one year down the line, Deloitte has set its sights on regaining its status, part of a wider strategy to develop and restructure its equity and capital markets and PLC advisory team. A first step was recently taken with the hiring of former JP Morgan executive director Chris Nicholls to run the independent advisory team. To further boost the team, Deloitte is now looking to attract high ranking bankers to the role of assistant director, ideally someone with expert knowledge and experience that will afford the authorities trust, allowing the firm to return to the IPO playground.

In a still open job description for the new role of assistant director for the PLC advisory team, Deloitte states that it is looking to become a "market-leading independent adviser". Further on the firm writes: "Central to this is for Deloitte to regain its status as sponsor. The team expects to see increased opportunities in this area and has made being approved as a sponsor a key priority."

Speaking about the developments and opportunities in the IPO market that the sponsorship status would leverage, John Hammond, head of equity capital markets at Deloitte, says: “We are confident that the IPO market will recover from recent turbulence and that clients will continue to see the importance of receiving truly independent advice when they are listing or raising secondary funds.”