The flotation will be a bonanza for management and staff, who benefit from a comprehensive shared ownership scheme. The company’s chief executive, Nigel Le Quesne, who has been with JTC for 25 years, alone should see the value of his shares shoot up to £30m after the listing.
The initial public offering conditionally raised £243.8m before expenses from an institutional placing of 84 million ordinary shares at 290 pence per share. This equates to a market capitalisation of £310m on admission.
Existing shareholders selling shares have also conditionally raised net proceeds of approximately £218.2m. Selling shareholders include private equity firm CBPE Capital LLP, which has supported the growth of the company, and some of the directors and management of the company, including Mr Le Quesne.
Following admission, 52.4 per cent of the ordinary shares will be held in public hands.
A statement from the directors said that the issue and selldown ‘will position the group for its next stage of development and provide it with an optimal capital structure for future growth’.
Mr Le Quesne, who was only the fifth person to join the company, which now has 550 employees, said that this was a fantastic opportunity for JTC.
‘Having grown the business over the last 30 years into a leader in the administration services market for funds, corporate and private clients, this is the next logical step in our strategy and will create a long-term capital base for the business. The IPO will provide us with access to the capital markets as we look to deliver future growth, both organically and through our targeted acquisition strategy in a sector which we view as ripe for consolidation.’
Mr Le Quesne thanked CBPE for their role in the development of JTC from a Channel Islands-focused administrator to a global service provider with a broad client base. He also emphasised that the staff were at the heart of everything they did.
‘JTC has always set itself apart through its belief in the value of true shared ownership, which has led to a very high percentage of equity ownership among our staff. We have a very clear and proven strategy of investing in our people to enhance the services we provide to our clients and this will remain the case in our life as a public company. We look forward to delivering value for all stakeholders in the business in the years to come.’
The ownership strategy dates back to 1998, when the management created the JTC Employee Benefit Trust, making all employees direct stakeholders in the business, aimed at attracting and retaining key staff and keeping them motivated and dedicated to the company.
This culture of shared ownership was further promoted in 2014 in the ‘Equity for All’ scheme which enabled any permanent member of staff to make additional equity investments proportionate to their seniority. This approach has been a key competitive advantage in the professional services market compared to businesses where employees are restricted to cash-based compensation and where equity participation is more limited.
A statement from JTC said: ‘The group’s cultural values and commitment to shared ownership result in a strong entrepreneurial approach among staff and aids the retention of key personnel at all levels of the group, with the objective of driving long-term financial performance and acquisition of market share’.
Apart from growing organically, the company has made 12 acquisitions since 2010. This has helped JTC to a 30-year track record, with a compound annual growth rate in revenue of 23% between 2007 and 2017, with growth last year at 17%.
The 550 staff provide administration services to funds with more than $85 billion in assets, and JTC has high-quality recurring revenues from this well-diversified client base. No client accounted for more than 3.2% of revenue last year, and the top ten provided approximately 18% of revenue during 2017 when total revenue reached just short of £60m, compared with £51m in 2016.
Only a small number of similar providers have the same global scale and reach as JTC, which operates in 17 jurisdictions.