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Misys CEO Targets New IPO, Machine Learning and P2P Lending

  • London-based banking software provider pulled IPO last year
  • CEO said company is launching new AI, P2P products in 2017

Despite presiding over the largest U.K. initial public offering to be pulled last year, the chief executive officer of Misys Group Ltd. is keen for the company to return to the public market.

Misys CEO Nadeem Syed said in an interview that he still hoped to list the company, however he declined to comment on potential timing. Before Misys tackles the public markets, it is targeting new products such as machine learning and peer-to-peer lending, he said.

A provider of banking software, London-based Misys was taken private in 2012 by Vista Equity Partners in a $1.3 billion deal. The company attempted to re-list last October, in what was expected to be one of the biggest U.K. tech IPOs in recent years.

Targeting an equity valuation of 3.75 billion pounds ($4.7 billion), almost a billion pounds less than originally planned, the deal was pulled at the last minute due to low demand for the shares.

“We decided to stop because the market wasn’t ready,” said Syed. “It took some people by surprise about how much transformation we had been through. We need to be more open and consistent with our communications.”

Misys is now targeting a host of new products, a step away from the somewhat dry world of banking software for treasury and capital markets transactions.

Earlier in January, Misys revealed new software that will enable banks to offer peer-to-peer lending to customers. Syed said it was still in early discussions with potential customers, but hoped to help banks recoup some of the ground lost to peer-to-peer startups such as Lending Club Corp. and Funding Circle Ltd.

Misys is also branching out into machine learning. The new offering, targeted for release in the next few months, intends to use machine learning to detect anomalies in trading patterns that will trigger alerts.

Syed said such a product could catch errors such as when Deutsche Bank AG mistakenly transferred $6 billion to a hedge fund client, after a junior trader inputted the wrong figure.

The U.K. company is also working on a blockchain offering focused on syndicated lending. The project at the proof of concept stage, said Syed.

Misys, which files its accounts in Luxembourg, posted $900 million in revenue for the 12 months through May 31, 2016, up 2 percent year on year, but down 4.7 percent from the year ended May 31, 2014.

Syed said the company was embarking on regular roadshows to keep investors up to date. But the next time Misys comes to market, it may find it tough to entice managers back to the table.

Four fund managers, who asked not to be identified, said it was unlikely they would be interested in a new offering even at a lower price. All four were offered shares in the previous IPO. Reasons ranged from confusion about the company’s offerings to concerns about achieving a realistic valuation.

“The destination is a public company,” said Syed. Although citing a range of factors, such as the U.K.’s upcoming exit from the European Union, that could upset markets and derail a future IPO, he added that when the timing is right, “the company can move very quickly.”

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