‘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
At least two-thirds of ETF flows are understood to be driven by intermediaries, according to Global X, as net flows into Australian ETFs spike 97 per cent in the first half of 2025.
Inflows for the first half of 2025 for GQG Partners stand at US$8 billion, but the firm has flagged fund underperformance could be a headwind for future flows.
BlackRock has announced its plan to acquire real estate investment firm ElmTree Funds which will be integrated into its new private financing solutions business.
With share price growth of 45 per cent for FY25, Australian Ethical has shared why it believes the firm has done so well compared to its active peers.