‘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."
AUTHOR
Nicholas O'Donoghue
Recommended for you
Bell Financial Group has appointed a chief investment officer who joins the firm from Clime Investment Management.
Private markets funds with “unattractive practices” could find themselves facing enforcement activity with ASIC chair Joe Longo stating he cannot rule it out in the future.
Despite ASIC concerns about private credit funds being accessed via the advised channel, there are questions regarding how high its usage actually is among financial advisers.
Challenger has looked to the superannuation industry for its appointment of a group chief investment officer, a newly-created role.
