4most set to be first employee-owned firm to float on the London market

A risk consultancy will become the first majority-staff-owned company to be admitted to the London Stock Exchange after announcing plans to go public next year.

4most provides credit risk analysis services to financial services companies to help them comply with regulations, invest, borrow money and protect their capital reserves.

Clients included some of the UK’s largest financial institutions, such as FTSE 100 insurer Aviva, Virgin Money, challenger banks Starling and Monzo, and TSB, the very first client it ever landed.

In July 2018, co-founders Mark Sisson and Mark Somers, along with early investor Beechbrook Capital, sold a 55 percent stake in the company to an employee ownership trust.

Under this arrangement, the staff indirectly became the majority shareholders of 4most, while Sisson, who died in 2020, and Somers retained their positions on the board of directors and their day-to-day leadership roles.

The move was motivated by a desire to retain and attract the best employees by providing stronger incentives, boosting morale and compensating technical specialists for their work.

4most now wants to become a publicly traded company to repay some of the loans the trust owed when it was formed, meaning employees can now share in a larger share of the profits.

According to The Timesthe trust will sell its 70 percent interest but retain the minimum interest necessary to ensure it continues to benefit from tax benefits.

The group also plans to transfer a stake of up to 30 percent to institutional investors and issue new shares, while Somers will sell half of his 20 percent stake.

Rob McDowell, CEO of 4most, told The Times: ‘We will be the first of many to reward employees with the bulk of the profits. It is a social and forward-thinking offer that not many companies can give.

“We want to have a market for our shares, which means employees can take advantage of share savings plans, and we can continue to pay a nice dividend because we don’t have to go through private equity transactions all the time, which can add up to significant costs.”

More than 1,000 UK companies are conducting an EOT, with a record 285 starting last year. according to research by the Association of Owners of Employees.

The Conservative-Liberal-Democrat coalition government of 2010-2015 introduced EOTs into law eight years ago to try and encourage more companies to give their employees more ownership and control over their jobs.

Supporters claim they lead to higher productivity and morale, have reduced staff turnover and absenteeism, and ensure staff receive tax-free annual bonuses of up to £3,600 a year.

Entrepreneurs can also avoid paying capital gains and estate taxes if they decide to sell their business to an employee trust.