Safeway Could Go Public With IPO Just Months After Going Private

Posted on April 28, 2015 by admin

Brokerdealer.com blog update profiles rumors surrounding grocery store chain, Safeway, and the possibility of the chain going public just months after being purchased by AB Acquisition. AB Acquisition took Safeway private and merged it with merged it with Boise, Idaho’s grocery store chain, Albertsons, which AB Acquisition purchased in 2006. The company has been rumored to hire investment bankers to plan an IPO, the company’s spokesman said that the company does not”comment on rumors.” This brokerdealer.com blog update is courtesy of the San Fransico Chronicle’s Kathleen Pender and her article “Just taken private, Safeway may go public again this year: report” with an excerpt below.

Talk about quick flips: The company that took Safeway private just three months ago is already planning to take it public again this year, according to a CNBC report quoting unidentified sources. If true, it would be Safeway’s third initial public offering.

The report said that AB Acquisition, the holding company that operates Safeway and Albertsons, has hired investment bankers to plan an IPO.

In a deal that closed Jan. 30, an investor group led by private equity firm Cerberus Capital Management bought the Pleasanton grocery chain and merged it with Boise, Idaho’s Albertsons, which it had purchased in 2006.

Private equity firms typically buy public companies and restructure them, which often involves selling or closing underperforming divisions, then resell them to another company or have a fresh IPO. The process typically takes years, not months.

An IPO would almost certainly include both Safeway and Albertsons, which operate as a combined company even though their grocery stores maintain separate names. Cerberus has made many changes at Albertsons including closing and selling many stores and selling off the underlying real estate. It hasn’t had time to do much at Safeway, other than laying off headquarters employees.

To continue reading about the possibility of a Safeway IPO, click here.

BrokerDealers Bringing In The Bucks:

Posted on April 28, 2015 by admin

BrokerDealer.com blog update profiles the revenue and profit performance of the US Broker-Dealer space as demonstrated by the pricing action in the iShares US Broker-Dealer ETF (NYSE:IAI) when compared to the returns of the S&P 500 (see chart). Below extract is courtesy of coverage from ETFtrends.com.

Independent broker-dealers generated double-digit revenue growth in 2014, and a broker-dealer- related exchange traded fund is outperforming in the financial space so far this year.

BrokerDealer.com database is the global financial industry’s leading source of BrokerDealer information, with detailed information on thousands of BDs in upwards of 30 countries worldwide.

Over the past three months, the iShares US Broker-Dealers ETF (NYSEArca: IAI), which tracks U.S. investment banks, discount brokerages and stock exchanges, has increased 7.8%, compared to the 2.5% gain in the broader Financial Select Sector SPDR (NYSEArca: XLF). Year-to-date, IAI was up 0.7% while XLF dipped 1.5%.

The 25 largest independent broker-dealers generated a 10.3% year-over-year rise in revenue over 2014, reports Bruce Kelly for InvestmentNews.

Top independent broker-dealers include LPL Financial LLC (NYSE: LPLA), which garnered $4.3 billion in revenue, and Raymond James Financial Services (NYSE: RJF), which added $1.6 billion. IAI includes a 3.4% tilt toward LPLA and a 4.7% weight in RJF.

The industry is experiencing an increase in fees. Revenue from investment products and services that charge a fee instead of a commission rose 20% in 2014 among the top 25 independent broker-dealers, mirroring a growing trend in the services industry.

For the full article from ETFtrends.com, please click here

Human Advisors War On Robo-Advisors

Posted on April 27, 2015 by admin

Brokerdealer.com blog update profiles human advisors trying to combat the recent rise in the use of robo-advisors orver human advisors. Robo advisors are a class of financial adviser that provides portfolio management online by using algorithms and use minimal human intervention. Robo-advisors are typically low-cost, have low account minimums, and attract younger investors who are more comfortable doing things online. With all these things working in robo-advisors’ favor, human advisors have been struggling to compete with the robo-advisors. CNBC’s Sarah O’Brien highlights recent tactics human advisors are using in her article, “Robo wars: How advisors are taking on cybercompetitors“, with an excerpt of the article below.

The growth of low-cost robo-advisors has made one thing clear to financial industry analysts: Human advisors who provide little more than investment advice have their work cut out for them.

“Advisors need to be more strategic about what they can offer clients,” said Will Trout, a senior analyst for research and consulting firm Celent. “Stock picking is a waste of time, and allocating has become a commodity because it can be executed by algorithms. So advisors have to operate at a much higher level and [address] a client’s unique situation,” he said, adding, “Otherwise, what are clients paying for?”

So-called robo-advisors are automated online investment advisory services. Along with providing automated, algorithm-based portfolio management advice, some of them offer automatic portfolio rebalancing and tax-loss harvesting.

Robo-advisors also charge less than the industry standard of 1 percent of assets managed for financial advisory services. And that, say analysts, is going to put pressure both on industry fees and on advisors themselves to justify fees that are higher than a robo’s.

To continue reading CNBC’s article on human advisors combatting robo-advisors, click here.

Laureate Education Inc. Planning $1 Billion IPO

Posted on April 24, 2015 by admin

Brokerdealer.com blog update profiles Laureate Education Inc., the world’s largest for-profit college chain, is planning to launch a $1 billion initial public offering in the United States. Laureate Education was founded in 1998 by Douglas L. Becker as part of Sylvan Learning Systems. In 2007, an investment group lead by Becker bought the Laureate Education section of the company. The company now owns and operates more than 80 institutions, both campus-based and online, in 30 countries, with more than 800,000 students enrolled.

This blog update profiling Laureate Education’s plans for an IPO is courtesy of BloombergBusiness‘s article, “World’s Biggest For-Profit College Chain Plans $1 Billion IPO”, with an excerpt below:

Laureate Education Inc., the largest for-profit college network in the world, is interviewing banks for a $1 billion initial public offering in the U.S., people with knowledge of the matter said.

The company, whose honorary chancellor is former President Bill Clinton, has been meeting with potential underwriters for an IPO that could value the education juggernaut at about $5 billion, said the people, who asked not to be named discussing private information. The company, based in Baltimore, owns 84 universities, mostly in emerging markets.

Laureate was taken private in a management-led $3.8 billion buyout in 2007, backed by an investor group including KKR & Co. and Citigroup Inc. The company pursued an IPO three years ago, people familiar with the situation said then, which never materialized. It would be the the biggest school chain to go public, edging out Nord Anglia Education Inc., the second-biggest, which raised $350 million last year.

The market climate surrounding for-profit education could be better. The For-Profit Education Index of 13 companies, including DeVry Education Group Inc. and Apollo Education Group Inc., has plunged 55 percent through Wednesday since its peak five years ago. Enrollment has slowed amid recruiting abuses and student debt concerns, leading to a regulatory crackdown.

To continue reading this article on the world’s largest for-profit college chain’s quest for an IPO, click here. To find a brokerdealer to help you get in on this IPO and others like it, click here.

China BrokerDealers Baffled By Exchange Snafu

Posted on April 23, 2015 by admin

BrokerDealer.com update is courtesy of extract from coverage from TreasuryToday.com. consequent to Monday snafu at the Shanghai Stock Exchange , when China’s stock trading was so abundant that the Shanghai Stock Exchange’s software was unable to properly display the turnover data – apparently there were too many zeros to factor in.

Turnover on the Shanghai Stock Exchange exceeded 1trn yuan ($161.28bn) for the first time on the 20^th April, but the country’s trading fever hit the news for a different reason – the exchange’s software was not designed to report volumes that high and, as a consequence, the data couldn’t be displayed properly.

A statement released by the Shanghai Stock Exchange confirmed that “this is software configuration issue, not a technical glitch.” It continued to explain that current software package, called SHOW2003, would need to be replaced in order to handle the higher volumes of reporting. Trading and price quotes for individual stocks were not affected, however.

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Resolving the software issue will be of upmost importance given the rapid growth of China’s stock market, which has nearly doubled over the past six months. The Shanghai Stock Exchange is now the world’s biggest in terms of turnover, totalling $1.85trn in March this year – surpassing the New York Stock Exchange which had a turnover of $1.53trn for the same month.

The last time this kind of software story was in the news, it was under very different circumstances: namely when the US national debt clock went past the $10trn mark in 2008. The upgrade to fix that glitch saw two extra digits added to the clock in anticipation of the country’s burgeoning debt.