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Funding Circle, Aston Martin spark IPO jitters

Two London IPOs have struggled this week: the reasons are nothing new

Aston Martin 680px

Equity capital markets bankers are fearful for the rest of the autumn IPO season after two deals in London left a sour taste in the mouth. The usual "it's deal-specific" mantra is being repeated by syndicate bankers desperate not to taint their own pipelines by association, but not everyone sounds convinced.

Peer-to-peer lender Funding Circle was the smaller of the two offers, at around £440 million before the greenshoe. Global coordinators were Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley. By the afternoon of October 5, one week after pricing and three days after unconditional trading in the stock began, the shares were some 23% below the IPO price.

Luxury carmaker Aston Martin's deal was for £1.8 billion, but was entirely secondary shares. More than two-thirds of Funding Circle's deal was raising new money. Aston shares go unconditional on October 8, but since conditional trading began on October 3 the stock has fallen 9%. Global coordinators were Deutsche Bank, Goldman Sachs and JPMorgan Cazenove, but there were a further eight banks below them.

"It's clearly not good for sentiment," said one banker close to the Funding Circle deal.

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