HCI Capital preparing IPO

Dresdner KW and CSFB have won the mandate for an IPO of HCI Capital later this year. This German investment management firm operates around 400 closed-end funds in the real estate, shipping, private equity and life insurance sectors.

The main thrust of the IPO would be to raise new money, although it is possible that the two existing shareholders might reduce their stakes. The minority shareholder is chief executive Harald Christ.

The size of the offer is unknown, but the company has expressed a wish to appear on the MDAX in Frankfurt. In order to achieve the levels of liquidity, size and other variables required to qualify for the MDAX, a company requires a free-float of several hundred million euros.

Meanwhile, the Flemish government has completed the sale of 30% of private equity firm GIMV. The placement had been flagged two weeks ago by the government, and management had recently completed roadshows boosting awareness ahead of the accelerated deal.

On May 11, lead banks CSFB, ING and Fortis Bank went out to the market to place 6.95m shares, representing 30% of the company. The sale doubled the free-float and involved stock equivalent to 250 trading days.

GIMV has widened its investment portfolio in recent years and now has investments in more than 100 companies spread across a number of countries. But only 15% of its investments are international, so the company is still a play on the Belgian economy.

Investors were also attracted by a healthy dividend yield of 5%. The placement was four times covered at the final price of €34, a 1.4% discount to the previous close of €34.50, and the deal raised €236.3m for the Flemish government.

Finally, bankers continue to talk about the possibility of major unlisted private equity firms considering the possibility of their own IPOs. The names mentioned have included KKR, Texas Pacific, Blackstone and Carlyle. KKR has already filed with the SEC for a US$835m flotation of the KKR Financial REIT (see IFR Buyouts Issue 12, p13).