Money managers under the microscope
Clarity is in short supply today when it comes to IPOs. Two companies filed for inital public offerings worth $100 million and $300 million on Monday, underscoring an impression of investors growing more comfortable with companies they may have deemed too risky in 2009.
Following the upbeat tone is aluminum giant UC RUSAL securing some heavy-weight investors --a member of the Rothschild family as well as one of southeast Asia's richest men-- in an IPO now bumped up in value to possibly $27 billion.
But wait, not all is rosy. A top China train maker, CNR, limped in its market debut after its $2 billion IPO in Shanghai. Valued at 49 times its 2008 earnings, investors tolerance was tested and the stock closed up a weaker-than-expected 2.34 percent.
"The weak debut is actually good for the market as it sends a warning for future IPOs, forcing companies to think twice before they set sky-high IPO prices," said Chen Huiqin, senior stock analyst at Huatai Securities in Nanjing.
SO: Gartmore is going ahead with a listing on the LSE after all, ending a “will it- won’t it” game that has gone on for quite a bit in the past few weeks. Phew!
The company CEO, Jeffrey Meyer, says the firm does not strictly need to raise cash now to pay off any urgent debt. In fact the debt taken on to finance the management buy-out in 2006 is not due for years and years to come. Gartmore is going to market simply because it feels like it is the right moment to do it.
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Harbinger Capital sells New York Times shares – Seeking Alpha
Payback time – The Economist
Time is right for hedge funds, manager says – DealBook
A web-based survey of more than 40 European institutional investors by investment bank Jefferies shows most -- 83 percent of those who responded -- are not expecting a re-opening of the IPO market in the UK and Continental Europe before the middle of 2010.
Only 23 percent of the analysts, portfolio managers and dealers surveyed reckon the IPO market will re-open by the end of this year.