Commodity broker Marex may revisit IPO when markets stabilise

By Eric Onstad

LONDON (Reuters) -Commodity broker Marex, which withdrew an initial public offering (IPO) last year, is keen to list on the market and is awaiting calmer conditions before a possible relaunch, its chief executive said on Wednesday.

Marex posted record profits for 2021 on Wednesday, putting the London-based firm in a good position to potentially go back to the stock market, CEO Ian Lowitt said in an interview.

Marex, one of the world’s largest privately-owned commodities brokers, dropped a planned IPO last June due to difficult market conditions.

“We do believe that there is a real benefit of being a publicly-traded company,” Lowitt said, referring to the ability to use stock to pay for acquisitions and to reward staff.

“There will be a point of time when the markets are receptive to an offering like Marex and at that time we would look to take advantage of it, but at the moment these markets are pretty frozen.”

An alterative for Marex’s private equity owners would be to sell the firm, Lowitt added.

Marex posted a 31% jump in revenue last year, while adjusted operating profit before tax gained 29% to $79.6 million.

The broker said trading conditions were positive in the first quarter of 2022, which “has resulted in performance significantly ahead of the same period in both 2021 and 2020.”

Rising commodity prices have spurred investor interest in the sector, while rising interest rates are also positive for the firm, which usually holds about $5 billion of client funds, Lowitt said.

“A 100-basis-point move in interest rates adds probably $30 million to our profitability and that’s something that we anticipate for the second half of 2022 and into 2023, which wasn’t there last year.”

The commodities market had a strong run last year as economic growth recovered, investors looked for a hedge against rising inflation, and metals demand was expected to benefit from a green revolution.

Marex is majority owned by private equity firm JRJ Group and its partners Trilantic Capital Partners and BXR Group, which bought stakes in the broker in 2010.

(Reporting by Eric Onstad Editing by Louise Heavens and Mark Potter)