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A cautious revival of the London IPO market

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The London Stock Exchange has had a disappointing few years. It has been devoid of any major initial public offerings since Deliveroo’s disastrous 2021 floating. Investors and market bosses have been let down, too, by a series of snubs and turnabouts, including former UK tech star Arm’s decision to list in New York and Turkish miner WE Soda’s last-minute withdrawal, both in 2023.

So it is with a measure of caution that many in the City have welcomed reports of three companies that appear set to list in London. Raspberry Pi, the British microcomputer maker, has confirmed a listing with an expected valuation of up to £540mn. Shein, the Singapore-based Chinese fast fashion conglomerate, is understood to be planning a London listing — and has reportedly been wooed by Labour and the Conservatives. Anglo American is also said to be considering an IPO of De Beers, the South African diamond giant, via the London market as part of a radical restructuring plan.

While all this would be a boost for the London market, it is not a perfect reopening. In the “vibes”-based IPO market, the company that tests the sluggish exchange will set the tone for those that follow. In an ideal world, a new era would have been ushered in by the listing of a homegrown tech star or earnings behemoth. Raspberry Pi does not exactly fit the bill, with a modest valuation and products that have limited use beyond students and hobbyists.

For Shein, by far the largest of the three, London was not its first choice. Rather, its earlier attempt at listing in New York was apparently rebuffed by anti-China sentiment. Its lustre is further dimmed by accusations of forced labour, and it remains possible that the Chinese Communist party could revoke its blessing. Market reactions to De Beers could vary, too, given its complex relations with the Botswanan government and questions over the sustainability of its business model.

However, this is the real world — not one where wishful thinking alone can create a British tech giant. Raspberry Pi and Shein IPOs ought to be celebrated. Market authorities and advisers should be dedicated to seeing their listings over the finish line. A De Beers listing is also worth encouraging, provided its sellers can address its business fundamentals.

The London market is currently experiencing

FIF 2024: ‘Nobody is actually doing AI’

Speaking at Investment Week’s Future of Investment Festival today (5 June), Hulme, who is chief AI officer at WPP and CEO of AI technology company Satalia, said AI has the potential to optimise decision making and automate tasks, but warned that beyond ten years, “I do not think anyone knows what they are talking about”. “Automation is stupid. It is not intelligence,” he added. Since the recent AI boom has dominated front pages and boardroom conversations, some of the world’s largest companies have incorporated AI in their business models and consulting. Hulme said that despite the in…

Kelly Prior and Steve Kenny join Rodger Kennedy’s new venture Boutique Capital Partners

Kennedy, former head of UK wealth at Ninety One, left the firm in January this year after 23 years to launch his own venture. In a LinkedIn post, he explained BCP will partner with asset managers to provide outsourced distribution for “high quality differentiated” investment strategies seeking access to the UK, Irish, and Swiss intermediary markets.  Kennedy said the hires were the next stage of BCP’s ‘pre-launch phase’, adding that the appointments had “an incredibly rich set of skills in order to identify and partner with the most exciting investment opportunities out there relevant…

FIF 2024: Half of Article 8 funds target less than 10% of sustainable investments

Speaking at Investment Week’s Future of Investment Festival today (5 June), Hortense Bioy, director of sustainable research and global manager research at Morningstar, revealed that the vast majority of Article 8 funds in Europe target as little as 10% in sustainable investments. This compared to around 90% for Article 9 funds. As a result, the different definitions of what sustainable investment is have also resulted in greater exposure to fossil fuels among both Article 8 and 9 funds, according to Bioy. At the same time, they tend to be less involved in controversial activities –…

FIF 2024: Infrastructure, AI and obesity drugs are the next ‘big things’ for investors

Speaking at the Future of Investment Festival today (5 June), Fox dismissed worries about macro and geopolitical predictions, advising investors to look at promising investment trends instead, adding that sustainable funds will be a “great fit” for the recent developments in infrastructure, digitisation and healthcare. His predictions come at a time when investors are growing wary of economic hardship and a more tense geopolitical climate, with China taking an increasingly assertive stance against the West and the US increasingly resorting to protectionist policies to protect its manufac…

Bracewell adds energy and infrastructure PE lawyer 

Law firm Bracewell has added energy and infrastructure-focused private equity lawyer François Feuillat as a partner in its London office. 

Feuillat has joined Bracewell from global law firm Reed Smith, representing private funds on transactions in the renewable energy, conventional power, oil and gas, and mining sectors.

According to a press statement, Feuillat has over 25 years of experience advising private funds on M&A transactions in the energy sector, particularly for energy transition projects. He has provided counsel on more than $100bn of private equity deals and corporate finance transactions in over 70 countries.

Feuillat’s appointment follows those of Mark Hunting in London; Dean Hinderliter in Dallas; Jennifer Speck in Houston; Parker A Lee, Scott Le Bouef and Brian R Rogers in New York; and Eugene R Elrod in Washington, DC.

AXA Framlington Global Technology lead manager Jeremy Gleeson to exit

Gleeson will depart in August to pursue another opportunity outside the firm, a spokesperson confirmed. He will work closely with the investment team to ensure a smooth transition, they added.  In the interim, fund management responsibilities will be taken over by the technology investment team and led by head of global thematic strategies and portfolio manager Tom Riley, as well as technology portfolio managers Brad Reynolds and Pauline Llandric. AXA IM to acquire US private equity boutique W Capital Partners “They are a team of experienced portfolio managers who have worked al…

Sternlicht defends gating Starwood REIT withdrawals, hopes it will be a ‘six-month thing’ as rates fall

Starwood Capital Group CEO Barry Sternlicht defended his decision to cap how much money investors could pull from his real estate fund. Starwood introduced new restrictions that cap monthly withdrawals at 0.33% of net asset value. Sternlicht said he decided to implement the cap to protect loyal clients who never redeemed. Barry Sternlicht, chairman and CEO of Starwood Capital Group, speaks at the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, on May 7, 2024. David Swanson | Reuters

Barry Sternlicht, Starwood Capital Group chairman and CEO, defended his decision to cap how much money investors could pull from his real estate fund amid mounting losses and redemption requests.

“With all the hysteria in the media, people are saying, ‘I want to get out now and I’ll come back in later when the coast is clear.’ So we took a very tough decision,” Sternlicht said on CNBC’s “Squawk Box” Wednesday. “I decided that for the benefit of the 80% of people who’ve never redeemed we would slow down redemptions. … We hope this is going to be a six-month thing.”

The investor’s $10 billion Starwood Real Estate Income Trust, which invests in multifamily, industrial and office properties, has suffered from steep declines as it became difficult to refinance loans in light of the Federal Reserve’s aggressive rate hikes.

In a letter to shareholders on May 23, Starwood introduced new restrictions that cap monthly withdrawals at 0.33% of net asset value, compared with the previous 2% limit. Meanwhile, the firm also decided to waive 20% of its management fee.

Sternlicht said he decided to implement the cap to protect loyal clients who never redeemed, which represents 80% of his investors, according to the letter.

The firm said the real estate trust, one of the largest in the world, maintained $752 million of immediate liquidity as of the end of April.

Sternlicht called the Fed’s monetary policy “unbelievably ineffective,” but he believes interest rates will come down soon.

“The real estate asset class is probably the biggest victim of the unintended consequence of his actions,” he said. “The spreads are coming in, which means the markets are healing, the future’s getting clearer.”

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Luminate Capital Partners promotes MD to partner 

Luminate Capital Partners, a San Francisco-based private equity firm focused on enterprise software companies, has promoted Lucy Li to Partner. In her new role, Li will oversee portfolio performance. 

Li joined Luminate in 2022 and most recently served as Managing Director of Strategic Finance.

Prior to Luminate, she worked in finance and business planning at Meta; private equity investing at Genstar Capital; and investment banking at JPMorgan.

Luminate manages almost $2bn, according to a press statement. Its portfolio includes Axonify, Compliance & Risks, Conexiom, LiquidFrameworks, Oversight Systems, PDI, StarCompliance, Ease, Suralink and Thought Industries.