IPOs take off – After a long hiatus, the investment company IPO market appears to be taking off. At present, Nippon Active Value is the only new trust to have launched this year. However, a queue of potential new funds is forming and we will soon find out which of them will make it across the finish line.
We have been asked to write on some of these and hopefully you have already read our notes on Tellworth British Recovery and Growth Trust and Home REIT. This week saw the publication of prospectuses by Buffetology Smaller Companies and Mailbox REIT (which is aiming to list on the innovative IPSX exchange – my colleague Richard Williams tells you more about that here). They should soon be joined by Schroder British Opportunities.
Existing funds hoovering cash
These new funds are competing for attention against some fairly sizeable fundraises from existing investment companies. We have already seen Greencoat UK Wind raise an amazing £400m this week and Hipgnosis Songs raise £190m in just three days. Now, Supermarket Income REIT is looking for £150m, Merian Chrysalis wants £50m and Triple Point Social Housing REIT is asking for £70m.
Increasingly, individual investors are getting the chance to apply for shares in these issues through offers for subscription and intermediaries offers. One of the things that we feel strongly about is that individual investors should have the same access to these issues as professional investors. Issues of shares by existing stocks are usually priced at a discount to the market price. There is no good reason why individual investors should miss out on these opportunities and the FCA should be mandating equal access for all, in our view.
There is another problem with this, however, in that many of the trading platforms that we all use pick and choose which of these offers they show to their clients. Again, we think it should be a requirement that platforms offer every new issue to their clients. In the meantime though, a new service was launched fairly recently: PrimaryBid.
PrimaryBid
PrimaryBid is acting as a gateway for individual investors to invest in new issues that are not accessible through their trading platform. Investors can sign up to PrimaryBid, buy shares in these issues through its website and get these settled into their trading accounts at their usual platform. This feels to us like a step in the right direction.
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We try to update investors on all investment trust and property IPOs, C-shares and placings here – however, if a capital raise escapes our watch, just let us know and we’ll try to find out more about it.