Specialist Fund Market launched

The London Stock Exchange has announced the launch of a new Specialist Fund Market for highly specialized investment entities such as hedge funds, private equity funds and specialist property funds.

The new market will be open to both UK and international funds from November 2007, and will compete with European stock exchanges such as Euronext, which has hosted several listings of large private equity and hedge funds.

It will be distinct from but operate alongside the UKLA’s proposed new regime for investment entities listing on the official list and the London Stock Exchange junior market AIM. It will be a regulated market, which means that the Prospectus Rules and the Disclosure and Transparency Rules will apply, but the listing rules will not. UK and non UK domiciled investment entities are eligible to seek admission to the Specialist Fund Market, and the entity to be listed can take the form of a limited partnership.

None of the eligibility criteria that will apply to investment companies listed on the Official List will apply to entities listing on the Specialist Fund Market. This aligns the fund more closely with Euronext although it will not have any minimum capital requirements or requirements for a certain proportion of shares to be held in public hands.

This week also saw LPX, the Swiss based publisher of research and indices on global listed private equity announce the launch of an index of UK listed private equity vehicles, bringing to eleven the number of LPX listed private equity indices covering global and regional markets and sectors such as ventures, buyouts and mezzanine. LPX UK contains vehicles listed on the London Stock Exchange and AIM, with a minimum of 50% of private equity investment. It currently contains 22 YUK listed private equity vehicles, with a combined market cap of €15bn.

Sandrine Bradley