Financial management software provider Netwealth is set to be one of the biggest listings on the ASX this year when it hits the boards in late November.
Netwealth, which runs investment platforms used by a growing number of financial advisers and fund managers, will have a market capitalisation of $880 million when it debuts as a public company.
The Melbourne-based firm, established by finance industry veteran Michael Heine in 1999, is in the middle of a $264 million initial public offer, with some of the funds raised tagged for expansion in a part of the financial services industry traditionally dominated by major banks and financial institutions.
Netwealth provides a web-based platform to manage superannuation and other types of investment accounts for financial advisers and fund managers.
The company has been growing market share, with industry users giving its in-house developed platform a high rating.
Netwealth currently has just 1.7 per cent of the total funds under administration in Australia's wealth management market - compared with 15 to almost 20 per cent for platforms operated by some of the major banks and financial institutions - but the flow of funds to its platform has been accelerating.
In 2010, Netwealth had about 14,000 accounts and $2 billion in funds under management and administration, but as of September that had grown to about 56,000 accounts and $15.7 billion.
The float will also pay handsomely for Netwealth's current owners, including founder and now joint managing director Mr Heine.
The IPO comprises 30 per cent of shares on issue, with most of the balance held by brothers Michael and Leslie Heine, and Michael's son and joint managing director, Matt Heine.
Based on the $3.70 issue price, Michael Heine's 125 million shares will be worth $462.5 million post-listing.
Chairman Jane Tongs has told prospective shareholders Netwealth is profitable and highly cash-generative.
"We are well placed to generate profitable growth from the structural shift within the platform market from banks to specialist platform providers," Ms Tongs said in a letter to shareholders in the Netwealth prospectus.
Deloitte's director of corporate finance Tapan Verma says Netwealth's listing will overtake rubbish collector Bingo Industries, which listed in the second quarter of 2017 with a market value exceeding $600 million at the time.
"Other than the listings of certain investment companies or vehicles (such as Magellan Global Trust and MCP), there have been limited listings exceeding $500 million in market capitalisation," he told AAP.
Netwealth is forecasting an increase in revenue of about $20 million for 2017/18, up to about $80 million, from a revenue model centred on fees - mainly account administration, management and transaction.
The company will start trading on the ASX on November 20, having offered 71.3 million shares.
The IPO comprises institutional and retail offers but will not include a general public offer, with the retail component available only to brokers, platform clients and employees.
