‘Obnoxious pricing’ scuppers private equity IPOs
Initial public offerings (IPOs) for "good companies" owned by private equity firms are being passed over by fund managers, due to "obnoxious pricing".
Speaking at an Australian Unity hosted event in Sydney, Platypus Asset Management chief investment officer, Don Williams, said that while valuations for most IPOs were "pretty good", a number were overpriced.
"Towards the end of last year there was some obnoxious pricing from some IPOs, and typically those didn't get away," he said.
"We passed on a lot of IPOs that were good companies, because we just thought the pricing was obnoxious, and it won't surprise you to hear that most of those were coming out of private equity."
While Williams was critical of the offerings being made by private equity firms, he said existing stocks offered plenty of room for stock-pickers to prosper going forward.
"The thing that's interesting about the Australian market, even though it's been tracking sideways for longer than we'd like it to, there are still really good opportunities," he said.
"From our point-of-view, last year was a pretty good year for stock-pickers, and as long as you can ignore the index you can still make money in Australian equities."
Recommended for you
T. Rowe Price believes Australian growth is successfully managing to shrug off consumer weakness, but the firm’s multi-asset team is not yet positive enough to increase its underweight position.
Iress has issued an update denying the validity of “certain statements” made by an alleged threat actor, following a cyber incident last weekend.
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
