Veda plans capital raising by March 2014

Legislation on credit information that comes into effect next year is driving consideration of an IPO for the company.

Brett Cole

New legislation that will benefit Veda, a commercial and credit checking company, will push its owner Pacific Equity Partners to seek fresh capital before March 2014.

The private equity firm, which currently has 10 companies in its portfolio, has yet to formally appoint bankers to manage Veda’s capital raising. Citigroup and UBS may get the nod by the end of the week. Boutique investment bank Highbury Partnership, which is advising Pacific Equity Partners on its current portfolio, may garner a role in any capital raising.

If Pacific Equity Partners chooses an IPO for Veda, then it plans to retain a stake in the company. The size is uncertain as it may be tempted to take profit from its investment through a share sale. It bought Veda $974 million in July 2007.

The firm, started in 1998, raised its last fund in 2008, a $4 billion capital pool that is Australia’s largest private equity fund.

The size of the capital raising may be determined in the next four weeks. The decision as to whether to raise funds this or next year may also be made then. The timing of Veda’s capital raising is driven less by the markets than by the regulatory changes in its business.

Veda operates primary credit bureaux in Australian and New Zealand. They are now principal sources of consumer credit information.

In March, comprehensive reporting comes into effect that will open up additional information about consumer accounts and how well they meet repayments.

Consumers in the US and UK have used access to their own data to improve their personal finance deals with banks and other lenders. Veda forecasts that demand for its data-driven services will increase as consumers seek not only information about themselves but ways to ensure they are not subject to fraud and misreporting of their true financial position.

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