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Nicola Horlick, the veteran fund manager once dubbed the City’s “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” and she is about to embark on a fundraising round to raise at least £50m in regulatory capital, which would allow her bank to lend £300m. Horlick said the aim is to be lending £3bn by the end of the first five-year period, which would require further fundraising rounds.
The fund manager, who met with 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.
READ The return of Nicola Horlick: ‘Politics is in my DNA’
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 a tricky place at the moment.”
Peer-to-peer lending takes money from retail investors and lends it to individuals and companies. It offers investors higher returns than savings accounts while allowing businesses to take on riskier loans.
However, it tends to generate lower returns for the firm than conventional bank loans, as most of the profits are passed on to those who put the money in the pool.
Horlick said in order to launch a bank, there was “a huge amount of tech work to do”, 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, said Horlick.
“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 loans.
“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.
Horlick’s plans come after other P2P lenders have ditched businesses.
Zopa, the P2P platform set up in 2004, announced in December 2021 that it would exit this part of the business to concentrate on its banking operation.
Zopa, 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 P2P lending in 2021, sold this part of its business in April to Sweden’s Lendify in an all-stock transaction worth €100m (£86m).
Lunar said operating a P2P platform and scaling the business would require “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, who suspended her after it was claimed she was looking to move to a rival along with some of her colleagues. She later resigned and set up SG Asset Management in 1997.
In 2019, Horlick unsuccessfully stood as a Liberal Democrat candidate for Chelsea and Fulham in that year’s general election.
To contact the author of this story with feedback or news, email David Ricketts
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