Auto Trader shares leap in UK's biggest private equity-backed listing

* Auto Trader up almost 13 percent on debut

* UK's biggest listing since Royal Mail (LSE: RMG.L - news) , by market value

* Largest-ever private equity-backed listing (Updates share price, adds comment, details)

By Nishant Kumar and Freya Berry

LONDON, March 19 (Reuters) - Shares (Berlin: DI6.BE - news) in online car marketplace Auto Trader Group rose more than 16 percent after their debut in London on Thursday in Britain's largest ever private equity-backed listing.

The flotation gave the company a market value of 2.35 billion pounds ($3.5 billion), making it also Britain's biggest listing of any kind since Royal Mail in late 2013.

Auto Trader, owned by private equity fund Apax Partners, had set the price for its initial public offering (IPO) at 235 pence per share.

The shares rose as much as 16.5 percent from the offer price to almost 274 pence, and at 1123 GMT were up 12.8 percent.

The company, which started out in the 1970s as a magazine, now operates Britain's leading website for buying and selling new and used cars. It had said it would raise about 437 million pounds in the offer by selling 590 million shares, or 59 percent of its issued share capital.

Apax Partners will use the proceeds to repay debt.

"They took the opportunity to reduce their overhang. They could have priced higher but they chose instead to do the bigger deal," said a source close to the deal, referring to the unusually large proportion of shares that the fund is selling.

Apax bought 49.9 percent of Auto Trader from the Guardian Media Group in 2007 and subsequently took full control in 2014 for 619 million pounds. The listing followed an approach by U.S. private equity firm Hellman & Friedman earlier this year with a potential 2 billion-pound takeover offer.

Money raised from IPOs is down 16 percent globally as of March 12 this year compared with the same period of 2014, according to Thomson Reuters data, although the number of offerings is on a par.

Last year saw a spate of private equity-backed offerings, as funds took advantage of soaring stock markets to exit investments made before the crisis.

Auto Trader currently generates 250 million pounds of revenue a year and employs 830 people.

Bank of America Merrill Lynch and Deutsche Bank (Xetra: 514000 - news) are joint global co-ordinators and joint bookrunners, with J.P. Morgan Cazenove and Morgan Stanley (Xetra: 885836 - news) retained as joint bookrunners. Numis Securities is acting as lead manager.

($1 = 0.6715 pounds) (Editing by Jane Merriman and Pravin Char)