IPOs back on private equity agenda

Private equity firms are once again looking to the stock market for exits, according to brokers.

Though there were only 18 initial public offerings (IPOs) on AIM in 2009, of which 13 raised money, investors are hoping the junior market of the London Stock Exchange will be a more fruitful exit route this year.

Mark Brady, head of corporate finance at investment manager and stockbroker Brewin Dolphin, says, ‘Everyone seems to be dusting off IPOs that they’d mothballed, and we’re seeing more interest from private equity companies to use AIM as an exit.’

While a public listing may still be impractical for smaller companies because of lack of liquidity, companies with heftier capital requirements may find better value through an AIM listing than with private equity, believes Nick Tulloch, head of corporate finance at investment bank and AIM broker Arbuthnot Securities.

Says Tulloch, ‘Debt remains very hard to get, so for any company that requires significant amounts of capital AIM is the better bet. We’re talking to a number of private equity houses about doing IPOs of their portfolio companies.’

Mark Brady and Nick Tulloch were interviewed for AIM in Review 2010, the most comprehensive survey of AIM in the market’s history.

Nick Britton

Lexus Ernser

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...