Firm: Doughty Hanson
Public vehicle: Doughty Hanson & Co. Investments LP
Targeted IPO value: $1.27 billion (€1 billion)
Underwriters: Citigroup, Goldman Sachs
What was supposed to be the latest race car built to conquer the public markets sits stalled in its garage.
called off plans to hold an IPO on Amsterdam’s Euronext market last week. The London-based private equity firm had intended for its public vehicle,
The firm included terms to assuage investor fears that the fund might suffer the same fate as similar vehicles that have quickly sunk below their IPO price. Doughty Hanson put a cap of approximately $1.5 billion (€1.15 billion) on the fund, and adopted a structure that delayed the payment of management fees and carried interest. But it wasn’t enough, and now the mothballed IPO joins the parade of proposed private-equity public offerings that never quite made it to market.
“Concerns over the trading performance of similar recent transactions, which trade at discounts of up to 15% compared to IPO price, mean that the offering has been postponed so that investors are not exposed to any potential discount,” the firm said.
Doughty Hanson may well have been referring in part to New York-based
The withdrawal of Doughty Hanson from the IPO market, at least for now, slows the advance of private equity firms into the public equity markets. But investors are still hopeful about the future of these public ventures. For many, the move to the public realm is a sign of private equity’s institutionalization. It provides a pool of permanent capital for private equity firms to draw upon, and bridges the gap between private equity’s cottage industry past and today’s world of mega-funds and consortium deals.
Inded, there are still more public launches in the pipeline. Swedish private equity firm