Goldman-owned Petershill Partners bounces back from slump in London debut
Shares of Petershill Partners, owned by Goldman Sachs, recovered from the first falls on Tuesday when the alternative asset manager debuted in London with a market cap of £ 4 billion.
The group, which owns minority stakes in 19 alternative asset companies with a total of $ 187 billion in assets under management, had lost 3% by lunchtime in London.
Goldman had valued the IPO at 350p per share, the level at which shares closed after falling earlier in the day.
Petershill was looking to raise £ 1bn from the initial public offering, with the exercise of the ‘greenshoe’ – an option to put more shares on the market which can then be used to stabilize the price if it drops – raising an additional £ 200million and bringing the total to £ 1.2 billion. Including the green shoe, this represents 29 percent of its issued share capital.
The new shares issued by the company are worth £ 547million, while some existing investors have given up on shares worth £ 465million. Proceeds from the IPO will be used to fund expenses and buy more stakes in alternative asset managers.
“The Petershill Partners IPO appears to have been reasonably priced,” said David McCann, analyst at Numis. “I’m surprised there hasn’t been a rise in the share price today, but it’s still just the beginning.”
Petershill is part of Goldman Sachs Asset Management and is headed by Co-Directors Ali Raissi and Robert Hamilton Kelly.
It does not disclose salaries or “earned interest” – the profit share of successful funds – received by Raissi and Hamilton Kelly. Its price statement released on Monday lists shareholders who own more than 3% of the company before and after the IPO, but most of them are fund names without an investor identity. And, while Petershill Partners describes the names and strategies of its 19 managers, it does not disclose their assets, fund performance, income or earnings.
McCann said the London list lacked transparency. “The disclosures regarding compensation, other investors and the details of the ownership of its minority stakes are terrible,” he said.
“This is one of the huge conflicts of interest of a private asset portfolio
public market listing – usually as a manager you don’t want
those details there.
A person close to Petershill said: “We gave mixed figures on the performance, assets, earnings and margins of the 19 holdings, and our comments on the roadshow were that this was sufficient.”
Petershill Partners pays Goldman Sachs a recurring operating expense of 7.5 percent of its income from investments in management companies. On this basis, the recurring charge would have been $ 17.2 million in 2020.
When Petershill was created by Goldman in 2007, it was the first in a series of groups created to take stakes in private equity and alternative investment firms in order to benefit from the management and performance fees they generate. .
Since then, the business has exploded, alongside the broader alternatives industry. Competitors include Dyal Capital, Blackstone’s Strategic Capital Holdings and AlpInvest Partners.
About four-fifths of Petershill’s assets are in private market managers and the remainder in hedge fund strategies. The holdings include stakes in Caxton Associates, one of the world’s oldest and best-known hedge funds, Ross Turner’s Pelham Capital, and technology buyout firm Accel-KKR.
The IPO gives retail investors the opportunity to buy in an industry that has generally been the preserve of institutional investors as it charges high fees and requires clients to lock in their money for many years.
The IPO follows that of UK-based Bridgepoint Advisers, which raised £ 300million in a London IPO in July. The buyout group’s stock has risen 15 percent since then. Earlier this week, Antin Infrastructure Partners, a private equity firm specializing in infrastructure, raised € 550 million in a Paris listing, giving it a market capitalization of € 4.1 billion.