Bridgepoint’s first day of electric trading comes after private equity firms closed more than $ 500 billion in deals in the first half of the year, a record pace fueled by low interest rates and depressed valuations in some markets .
Founded in 2000 after a management buyout from NatWest Equity Partners, Bridgepoint raised £ 300million in the initial public offering. The group, which sold shares at 350 pence, said the money would be used to reduce debt and fund investments. Existing investors have sold around £ 489million of shares.
The London-based group joins a small coterie of listed European buyout companies, including the 3i group listed on the FTSE 100, the Switzerland-based Partners group, the French Eurazeo and the Swedish EQT, listed in 2019. In the United States , a number of big-name buyout groups are listed including Blackstone, KKR, Carlyle and Apollo.
These remarkable beginnings show that private equity groups “are uniquely positioned in an environment of lower interest rates for longer interest rates,” said Will Howlett, analyst at Quilter Cheviot. “Private equity and private debt have outperformed the public market counterparts and, as a result, institutions are increasing their allocations in pursuit of decent returns. “
The funds have accumulated high levels of liquidity during the coronavirus pandemic and benefit from the very low cost of borrowing and opportunities in perceived value areas such as the UK.
However, the industry’s record-breaking pursuit of UK companies has drawn furious criticism from some asset managers that companies are being clawed back on the cheap given the double hits of Brexit and then the pandemic.
Nonetheless, Bridgepoint’s IPO is a welcome boost for a London market with a mixed record for IPOs this year. In March, Deliveroo was called the worst IPO in London history after shares of the food delivery app fell 26% on their opening day, despite fintech Wise making its debut out in force in a rare direct listing earlier this month.
Bridgepoint, which is best known for owning the Pret A Manger sandwich and café chain, has a free float of around 27% of the company and ended the day with a market cap of £ 3.7 billion.
Investors who missed their desired allocation in the stock offering helped push the stock up on Wednesday, a fund manager said.
Bridgepoint sold Pret A Manger to investment group JAB Holdings in 2018 and backed Dorna, who owns the international rights to MotoGP. Last month, Bridgepoint took a stake in the Itsu catering group and is also a long-term supporter of online cycling and running clothing retailer WiggleCRC.
The buyout group, which until now was owned by 140 of its associates and Dyal Capital Partners, has opened offices in New York, San Francisco and Amsterdam in recent years. Last year, it bought EQT’s credit arm, expanding its lending capabilities as the pandemic left businesses in need of new funding.
Additional reporting by Attracta Mooney