Margarita M. Phillips 
Pepper Money’s IPO plans come after a larger refinancing of the Pepper Group globally. It is understood that the three investment banks which obtained mandates participated in the refinancing.
The three investment banks replace Citi and Macquarie, which were previously mandated to prepare Pepper for an IPO in Australia.
Pepper’s management team, led by renowned CEO Mario Rehayem, led institutional investors in a series of non-deal traveling meetings early last year as part of the preparations for the IPO .
Second chance
However, Pepper’s listing plans were postponed when COVID-19 hit financial markets in Australia and overseas, and closed the listing window. Investor appetite for floats has since returned, as shown by Liberty’s successful float on December 15.
Importantly, the Liberty deal showed fund managers were ready to back non-bank financial institutions, which have been able to grow their loan portfolios faster than the Big Four and have achieved higher returns on their equity. Shares of Liberty have risen 33% since listing, while shares of Resimac, another ASX-listed non-bank lender, have more than doubled in the past six months.
When Rehayem met with the fund managers last year, it is understood that investors made it known that they would rather buy from an Australia / NZ pure play lender, rather than the large Pepper group which was previously listed on the ASX. Pepper created Pepper Money.
A listing is likely to create an exit – or, more likely, a partial exit – for KKR, which acquired Pepper through its credit investment unit in 2017. KKR Credit bought the company together with some private investors, including CEO and Group Director of Pepper, Michael. Culhane.
